Expatriate tax ebook - China

What taxes?

Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes

Capital gains tax
There is no capital gains tax in China. Instead, capital gains are subject to IIT as income from transfer of property.

Inheritance, estate & gift taxes
There is no inheritance or gift tax in China.

Investment income
Interest income, dividends and other investment income arising in China are subject to IIT. For individuals who are domiciled in China, or who have lived in China for more than 5 years, tax is paid on worldwide income.

Local taxes
There are no local taxes imposed on the income of individuals in China.

Real estate tax
In addition to IIT, income from transaction of real estate in mainland China may be liable to business tax, urban real estate tax, urban land use tax, land appreciation tax, deed tax and stamp duty.

Social security taxes - 2008
In practice there are no social security taxes or compulsory pension contributions imposed on foreign individuals working in China.

Individuals from Hong Kong, Macau and Taiwan hired directly by a PRC entity shall contribute to PRC mandatory social insurance. However, the implementation rulings and contribution mechanism are not available yet.

Stock options
Net gain on the exercise of stock options is subject to IIT as income from employment.

Wealth tax
There is no wealth tax in China.

Other specific taxes
There are no other specific taxes in China.

Information about China:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities