Starting from the fiscal year 2019 both local Chinese and foreign nationals employed in China are required to declare their annual individual income tax before the end of June 2020.
We suggest that you share the instructions directly with all your employees, and believe all local staff will be able to make their declarations without any issues.
For foreign employees there are a few additional steps:
1. Registration code form (?????? - zhuce dayindan) should be obtained at the tax bureau.
- Bring original passport (some tax bureaus accept copy of passport, however this should be confirmed beforehand).
- If the employee is not going by him/herself, the person going on his/her behalf should bring a signed power of attorney (POA)
2. The temporary code obtained at the tax bureau should be used to login to the government website within 7 days.
- Login to https://etax.chinatax.gov.cn
- Follow the instructions on the website to create a permanent login.
- Please note, however, the website is currently only in Chinese.
3. Download the app and login with the password created on the website.
- App details: ????? – geren suo de sui.
- Follow the instructions provided by R&P China Lawyers.
- For local Chinese employees
The taxpayer does not need to apply for annual tax clearance if:
- the annual comprehensive individual income is no more than CNY 120,000; or
- the payable supplementary tax is less than CNY 400; or
- he/she does not intend to apply for a tax rebate;
Even though this means some of your employees might not need to complete the annual tax clearance, we strongly recommend all to login to the system in order to confirm. Especially since the employer has the responsibility to remind all employees to complete it, and not doing so might lead to administrative liabilities.
- For foreigners: If the taxpayer has no resident domicile and has stayed no more than 183 days in China during one tax payment year, he or she does not need to apply for tax clearance. If a taxpayer stays in China for less than 24 hours in a day, that day will not be counted as a day that (s)he stays in China;
3. If the taxpayer (including both local employees and foreigners) needs to make supplementary payments for tax (except circumstances where the taxpayer meets the standard to be exempted from handling tax clearance), but fails to handle annual tax clearance in accordance with the laws, the taxpayer may face administrative punishment and his or her behavior may be filed in the personal tax payment credit records.
Since the website and the app available to perform the annual tax declaration only exist in Chinese, we recommend foreigners have their local HR-manager or entrusted professional tax-related advisor help them fill it out.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.