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China - Overview and introduction 

Taxation of international executives

In China, the scope of taxation for individuals is generally determined by two factors:


  • domicile status
  • length of residence in China.

An individual who is domiciled in China is liable to income tax on worldwide income. This means that regardless of where the income is sourced or received, this income is subject to tax in China.


A non-domicile of China is taxed in accordance with length of residence. A non-domicile who resides in China for no more than five years is taxed on income derived within China. A non-domicile who resides in China for more than five full consecutive years (long-term resident) may be taxed on worldwide income from the sixth year of residence onwards.


If a non-domicile is present in China for 90 days or less during a year, the compensation received for performance of services in China is not subject to tax if the economic employer of the individual is not a Chinese entity during his/her assignment in China and the costs of such employment are not borne by an entity within China. Where a tax treaty is applicable, a non-domicile may be exempt from tax in China for income earned during periods of up to 183 days in China during a taxable year, or a 12-month period, provided certain requirements are met.


The income tax rates on employment income range from 3 percent to 45 percent. Investment income and capital gains are generally taxed at a flat rate of 20 percent unless otherwise indicated.


The official currency of China is the China Yuan Renminbi (RMB).


Herein, the host country refers to the country to which the employee is assigned. The home country refers to the country where the assignee lives when he/she is not on assignment.


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Taxation of international executives