For overseas Chinese, China's new tax law will "tax the world"!
Big! All overseas Chinese note that this new tax policy came into effect on January 1, 2019! Will affect all Chinese.
Chinese friends in Australia, starting today, you not only have to pay taxes to Australia, you may also pay taxes to China!
On August 31, 2018, the standing Committee of the National people's Congress (NPC) passed an amendment to the individual income tax Law, and the new tax law will be implemented on January 1.
This is the seventh revision since 1980, seven years after the last revision, causing widespread public concern.
This new tax law not only affects Chinese residents, but also has a huge impact on overseas Chinese.
Let's take a closer look at the regulations of the new tax law and draw up a few key points for us:
"A person who has a domicile in China or does not have a domicile but has resided in China for more than 183 days during the tax year is an individual resident.
Personal income tax shall be paid in accordance with these regulations.
An individual who has no domicile or residence within the territory of China, or who does not live within the territory of China for less than 183 days within a tax year, is a non-resident individual whose income derived from the territory of China shall be paid personal income tax in accordance with the provisions of this Law ".
It's easy to understand if you split this sentence a little bit.
1. Domicile in China:
In other words, as long as you have a residence in China, you are an individual resident and need to pay taxes in China!
What do you mean you have a residence in China?
According to the interpretation issued by the State Council, "individuals who have domicile in China" refer to individuals habitually residing in China due to household registration, family and economic interests.
2. 183 days of residence in China
Even if you have no residence in China, as long as you live in China for 183 days, you are a resident.
3. Less than 183 days of residence in China
If you have no domicile and do not live in China, or if you do not have a domicile and live in China for less than 183 days in a tax year, such a person is a non-resident individual. It means not paying taxes on a global scale. But if you come to China to make money, you have to pay this part of the tax.
And that's what it's like to sum up to a diagram:
- Living in China-Global income is taxed
- No place to live in China, but 183 days a year-global income is taxed
- No domicile, no residence in China-tax according to the domestic income, no use of the income
- No place to live in China, not more than 183 days a year-tax according to domestic income, nothing to use
Don't try to get away with it. How much money does the Government make every month is clear?.
In the face of surging tax waves, many foreign partners may still be lucky.
Do you think that you are far from the ocean and that the Inland Revenue Department of China is unable to inquire about the overseas assets? Then you're so wrong!
In September 2018, China formally joined the intimidating CRS (common reporting standard, also known as the Joint Declaration guidelines.
Your account in Canada will be passed to China's tax authorities in accordance with CRS's exchange mechanism.
Your account in China will also be passed to Canada's tax authorities under the CRS's exchange mechanism.
So if any friends see that they meet the tax criteria, please consult your own taxman immediately.
You know, it's a lot of trouble not to pay taxes according to law. It may not be cost-effective to face fines or prison sentences.
Never make a small mistake.