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 IIT declaration deadline: 31 March 2017

 

With the upcoming IIT declaration deadline on 31 March 2017, we would like to give a short update on this topic as this affects everybody living and working in China on a daily basis.

 

China’s tax office requires an IIT declaration for all foreigners whose annual income exceeds 120.000 RMB. Firstly, it is important to know which parts of the expat’s salary are taxable income according to Chinese laws.

 

Income to Report

 

- Incomes of private industrial and commercial households, their business production and operations

- Incomes from contracting or leasing enterprises

 

Income to report from Remuneration

 

- income from author’s remuneration

- incomes from royalties

- incomes from interests, stocks, dividends and bonuses

- incomes from the lease of property

- incomes from transfers of property

- occasional incomes

 

and other incomes specified as taxable by the finance departments of the State Council.

 

Income that doesn’t have to be reported includes tax-exempt income specified in China’s IIT law (includes 9 items), income derived from outside of China which is not paid or borne by a Chinese entity for a foreign individual who stays in China for more than 1 year, but less than 5 years and PRC social insurance as well as contributions to the housing fund.

 

The tax rate levied on the taxable income is dependent on it’s accumulated amount. China has a progressive taxation system. A freelancer’s individual income tax progresses in three steps from 20% to 40%. Regular employees are taxed at seven levels from 3% to 45%. Furthermore, 4800 RMB tax exemption is granted for Expats. Additionally, each level has a quick deduction, which is also subtracted from the taxable income.

 

The formula to calculate IIT

 

IIT = [(Gross Monthly Taxable Income – 4800) * Tax Rate] – Quick Calculation Deduction

 

Important to know

 

The declaration requirement is the same as applied to Chinese employees. Although it is the employee‘s responsibility to prepare and to file the IIT declaration, if they fail to do so, it will fall back to the employer, who will have to pay the fine!

 

 

IIT declaration deadline: 31 March 2017

 

 

For further information continue reading about similar topics as Individual Income Tax (IIT) in China: The Ground Rules.

 

 

 

In case you need further help, please do not hesitate to contact our IIT specialists under This email address is being protected from spambots. You need JavaScript enabled to view it. !

 

Richard 1grau  
Richard Hoffmann
 
Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: This email address is being protected from spambots. You need JavaScript enabled to view it.
Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up to our Newsletter, give us a call +86 (10) 6561 6609 or contact us directly via This email address is being protected from spambots. You need JavaScript enabled to view it.  
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