Expat Tax-Exempt Allowances Extended to End of 2023

By Ned Kelly, January 1, 2022

0 0

Big news on the expat tax situation that has been the conversation du jour, and source of panic, for many a month now. For those not in the know, a proposed change to Individual Income Tax Law (IIT) would have seen the end of exemption allowances for foreign residents in China.

Well good news, as it has been postponed until the end of 2023.

On December 31, 2021 – the very eve of implementation – the Ministry of Finance and the State Administration of Taxation issued Circular No. 43 on the Continuation of the Preferential Policies on Individual Income Taxes such as Foreign Personal Allowances and Subsidies, declaring that the tax-exempt benefits for foreign nationals will be extended to December 31, 2023.

1998637503.jpg

The tax-exempt benefits are divided into eight categories:

  • Housing Rental

  • School Fees for Children

  • Language Training

  • Meal Expenses

  • Laundry Expenses

  • Relocation Expenses

  • Business Travel

  • Home Travel

Foreigners living in China and holding a work visa can enjoy a reduction in their IIT for fees going towards these eight categories, and will now continue to be able to do so for another two years.

In other good news, changes were to be made so that an annual one-time bonus would have to be combined with yearly income, and therefore IIT paid on said bonus. However, it has been announced that one-time annual bonuses can continue to be taxed separately – at a preferential rate – until December 31, 2023.

Sighs of relief all around.


[Cover image via Flickr]

more news

This Day in History: The Founding of Shekou Industrial Zone

On January 31, 1979, the Chinese government agreed to establish the Shekou Industrial Zone.

Here's How China's New Tax Laws Will Affect You

China is preparing to launch new individual income tax (IIT) laws, which will go into effect at the beginning of 2019.

Messi Finally Addresses 'Hong Kong Incident'

Superstar explains he missed game due to injury.

Starbucks' Lucky Savory Latte... with Pork?!

Lunar New Year coffee has a special twist...

Want to Change Your Life? F45 Challenge Starts Monday!

Win a month’s free F45 Membership!

25 Awesome Upcoming Events in Shanghai

The city is your oyster.

Spring Festival Spending Up Nearly 50%

Tourist trips up by a third.

0 User Comments

In Case You Missed It…

We're on WeChat!

Scan our QR Code at right or follow us at Thats_Shanghai for events, guides, giveaways and much more!

7 Days in Shanghai With thatsmags.com

Weekly updates to your email inbox every Wednesday

Download previous issues

Never miss an issue of That's Shanghai!

Visit the archives