1. 6-year Rule
The new period of stay will be counted from 2019. It means that all expats’ income will be IIT exempted until 2025. Foreigners who will spend in China more than 183 days each year from 2019 to 2025 and who will never leave P.R.C. for more than 30 days in a single trip, in a calendar year, will be subjected to IIT on their overseas income.
A single trip of more than 30 days, during the 6 years period, will allow the employee to restart the calculation.
2. Calculation of stays in China
If an expat stays in China less than 24 hours in a day (from 0 to 24), it will not be counted as a day in China.
3. Expats shall predict their days in China at the beginning of the year and declare taxes according to their position: tax resident or not tax resident
4. Foreigners with no Withholding agent in China
For expats who has no salary paid in China, is it possible to declare IIT by themselves or authorize domestic employer (who is a related party of the foreign company paying salary to them) to declare IIT on their behalf.
5. Preferential IIT for non-tax resident
The preferential IIT rate for annual bonus is available for non-tax residents. However, the rate is adopted according to the total amount divided by 6 (to a tax resident, it is divided by 12).
6. IIT calculation method and how to evaluate income from China or overseas have been clarified
| Domestic Salary | Overseas Salary | Note | ||||
| Days | Paid in China | Paid outside China | Paid in China | Paid outside China | ||
| Less than 90 days (183 days under the Treaty) | IIT | exempted | No IIT | No IIT | Non-Tax Resident | |
| 90 days to 183 days | IIT | IIT | No IIT | No IIT | ||
| 183 days to 6 years | IIT | IIT | IIT | exempted | Tax Resident | |
| More than 6 years | IIT | IIT | IIT | IIT | ||
7. Equity incentives calculation method for expats has been clarified
Income from equity incentive in a calendar year can apply the preferential IIT rate and the calculation method for bonuses.