Taxation of international executives
Are there social security/social insurance taxes in China? If so, what are the rates for employers and employees?
Social security contributions from both employee and employer are mandatory for individuals of China domicile who are employed in China.
The rates of contribution vary by location within China.
Effective from 1 July 2011, foreigners may be also subject to social security taxes in China.
From 1 January 2020, “Interim Measures for Hong Kong, Macao and Taiwan Residents’ Participation in Social Security Schemes in Mainland China” takes effect, which provides practical guidance for Hong Kong, Macao and Taiwan Residents’ Participation in Social Security Schemes in Mainland China.
Are there any gift, wealth, estate, and/or inheritance taxes in China?
There are no gift, wealth, estate, or inheritance taxes in China currently.
Are there real estate taxes in China?
Yes, but property that is held for personal use may be provisionally exempt from real estate tax, provided that certain conditions are met.
Are there sales and/or value-added taxes in China?
Yes, there is value-added tax (VAT) in China. VAT is applying to both goods and service sectors. Standard rate of VAT ranges from 6 percent to 13 percent.
Are there unemployment taxes in China?
Yes. Unemployment tax is one of the components of the Chinese social security system. See discussion on social security tax earlier.
Are there additional taxes in China that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
Shipments of household goods to China in relation to an assignment are generally subject to customs duties. Duties are either assessed on a lump-sum duty rate or based on percentage of the assessed value determined by China customs at the time of inspection.
There is also stamp duty in China, which is imposed on certain prescribed documents executed or used in China. Notably, lease agreements entered into for rental of accommodation in China are subject to stamp duty at the rate of 0.1 percent of the contract value, although this may not be strictly enforced in all locations throughout China.
Is there a requirement to declare/report offshore assets (e.g., foreign financial accounts, securities) to the countries/territories fiscal or banking authorities?
No. But as China implements the Common Reporting Standard (“CRS”) and has exchanged the related information with other countries/jurisdictions and jurisdictions for the first time in September 2018, it is possible that the individual’s overseas account information will be exchanged to the China authorities when certain conditions are met.
All information contained in this publication is summarized by KPMG Advisory (China) Limited, the China member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the PRC Individual Income Tax Law (Presidential Decree No. 9) and implementation regulations (State Council Order No. 707); the website of the PRC tax authorities; the website of the PRC social security authorities.
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