Policies related to personal income tax for expatriates

More and more foreigners are working in China, and many of them would like to apply for Chinese permanent residence in China in the future. While applying for permanent residence in the post category has strict requirements on the applicant's salary and tax payment, the expatriate personal income tax policy is more complicated, so how to effectively prevent the tax risk so as not to affect the application for permanent residence in China in the post category? Below we share with you some of the risk points of expatriates' individual income tax policy and management, which expatriate taxpayers working in China can check against to avoid tax risks. I. General provisions on income from wages and salaries 1. Whether the foreigners who are required to pay tax have already declared and paid individual income tax on their income from wages and salaries paid both within and outside China; 2. whether expatriates who have resided in China for five years and have resided in China for one year in the sixth year have declared and paid individual income tax in China for their income from salaries and wages and other income derived from sources inside and outside China in accordance with the regulations; 3. whether the calculation of the expatriates' time of residence and working time within the territory is accurate, and whether the tax agreements (arrangements) and tax calculation formulas are applied correctly; 4. whether the wages and salaries earned by the dispatched personnel of foreign companies providing domestic enterprises with technical support, business management support and other labor services constituting permanent establishments in China have been declared and paid for individual income tax in China in accordance with the regulations; 5. If a foreigner serves or is employed by a company (including an affiliated company) and also serves as a director or supervisor, whether the director's fee or supervisor's fee obtained by the foreigner has been merged with the individual's salary income and declared for payment of individual income tax under the item of "income from salaries and wages"; 6. Whether the amount of non-taxable income (including the employer's full burden of tax, a fixed amount of tax, a proportional amount of tax, and tax in excess of the country of residence) has been converted into taxable income for tax reporting purposes; II. About bonuses and subsidies 1. whether the monthly bonuses, half-yearly awards, task completion awards, etc. obtained in the same month have been combined with the income from wages and salaries to be declared and paid as individual income tax; 2. whether the bonus of several months, half-yearly award, task completion award, etc. obtained in the month in which the tax liability for salary income is less than one month or in the month in which there is no tax liability has been declared as one month's income from salary and wages separately for individual income tax payment; 3. whether the year-end lump-sum bonuses, year-end double pay, year-end labor bonuses, etc. obtained by foreigners have been correctly calculated and declared for tax payment in accordance with the regulations; III. Others 1. Whether the contribution of a foreigner who only serves as a director or supervisor in a company (including an affiliated company) has been declared and paid under the item of "Income from remuneration for labor services"; 2. whether the enterprise has withheld individual income tax under the item of "income from remuneration for labor services" for the foreign personnel who provide independent personal services for the performance of the enterprise's obligations; 3. whether the dividend and bonus income paid by the non-foreign invested enterprise to the foreign personnel participating in the shares has been fully withheld and paid as individual income tax; 4. whether the transfer of retained earnings and capital surplus of a non-foreign invested enterprise to the share capital of an individual foreigner has been declared for payment of individual income tax in accordance with the regulations; 5. whether the transfer of equity interests in domestic enterprises by individual foreign shareholders has been declared for payment of individual income tax in accordance with the regulations.