FAQs on individual income tax

What are the specific provisions on personal income tax for actors and sportsmen from foreign countries and Hong Kong, Macao and Taiwan?

1) Actors and sportsmen from foreign countries and Hong Kong, Macao and Taiwan engaging in performances in the name of groups, 1) if the actors or sportsmen are employed on a temporary basis, they shall be levied personal income tax based on remuneration for personal services after deduction of specified fees; 2) if the actors or sportsmen are employees of the performing group, they shall be levied personal income tax based on wages and salaries after specified fees deduction.

2) Actors and sportsmen from foreign countries and Hong Kong, Macao and Taiwan engaging in performances in their own names shall be levied personal income tax based on remuneration for personal services.

3) Actors and sportsmen should declare and pay personal income tax in tax authorities in the place where their performance is staged. In the case of income from remuneration for personal services, if an actor or sportsmanperforms in one place more than once, the individual income tax shall be calculated on the basis of the total income obtained from the performances.

How to pay personal income tax for employees getting material objects from foreign-invested enterprises and foreign enterprises?

If foreign-invested enterprises or foreign enterprises purchase houses or cars for their employees and confer full ownership to the employees based on agreed terms that the employees should work for a certain number of years in the enterprises or meet other conditions, the material objects shall be levied personal income tax in accordance with wages and salaries, based on the price indicated on the relevant documents or the price approved by the competent tax authority.

Since the value of material objects are relatively high and the ownership is gradually attained with the working years, the total sum shall be divided by the number of months of the stipulated working time (at most five years, and those more than five years shall be calculated on a five-year basis) and then add to the individual’s average monthly salary.

The expenditure of purchasing or renting cars for individuals paid by enterprises shall be levied tax based on the individual’s salary; if the individual can provide lease contract, the tax can be calculated on the basis of the income from lease of property.

How do foreign employees pay personal income tax for housing expenses in China?

If the foreign-invested enterprises and foreign representative offices in China rent or purchase houses for foreign employees living for free, the expenses can be exempted from personal income tax.

Housing fees given to foreign employees by foreign-invested enterprises and foreign representative offices can be listed as expenditure and included in the foreign employees’ If the employee can provide accurate proof of housing expenses, the actual expenditure can be deducted from the taxable income.