Foreigners living in the southern Chinese city of Guangzhou will
soon be exempt from some of their personal income taxes in line
with a document released by China's Ministry of Finance and the
State Administration of Taxation, according to news from the local
tax authorities.
According to a circular jointly issued by the Ministry of
Finance and the State Administration of Taxation, expatriates
working on China's mainland but dwelling in Hong Kong and Macao
(except that they are permanent residents of the two regions), who
have to commute between home and office every working day, will be
exempt from taxes for allowances on residence, food, cloth washing,
relocation and other non-cash subsidies after producing a valid
warrant and receiving investigation by relevant tax authorities. In
addition, foreign employees are granted tax exemptions for
allowance on language training and children's education in Hong
Kong and Macao.
Meanwhile, expatriates will be tentatively freed from paying
taxes for: Personal home and overseas traveling allowance, family
visit allowance as well as bonus and interest paid by foreign
investment companies.
Circular sets deadline for paying overdue
taxes
In a circular issued recently, China's State Administration of
Taxation stipulates that foreigners living on China's mainland will
receive amnesty from fines if they pay tax on under-reported income
by the end of June.
According to China's ministry of Labor and Social Security,
foreigners in China have exceeded 50,000 by the end of 2002, and
their average annual income is 176,000 yuan (US$21,250). They have
to pay personal income taxes for the part of their monthly salary
that surpasses 4,000 yuan. Owing to foreigners' tax dodging and
evasion, China each year suffers a loss of 10 billion yuan.
The amnesty encourages foreigners to solve past delinquent
problems and pave the way for a better environment for taxpayers to
comply with Chinese tax laws in the future, taxation officers
said.
According to the circular, foreigners will only be charged a
0.05 percent fine on any overdue taxes if it's paid before the
above-mentioned deadline. Outstanding taxes paid after June may
result in fines of up to five times of the tax liability.
(China.org.cn by Li Xiao,?June 11, 2004)