29 Aug 2009

Income sourced within China - Individuals

by Darren

In China your status of residency is important in dealing with source of income in China. For individuals the core types of income generated are wages and salaries. If you have lived in China for less than 365 days (non-resident) you are only taxed on the employment income earned during the actual working period. If you are a resident then you are taxed on all income earned in China. Finally if you have lived greater than 5 years in China then you are taxed on all income earned worldwide. Chinese tax laws deem certain types of income to be sourced in China irrespective of where the payment or location of enterprise making the payment is located. These include:
  • income derived from providing services whilst employed in or fulfilling contracts within the territory of China
  • income derived from leasing properties used by a lessee within China
  • income derived form assigning buildings or land-use rights or other properties within China
  • interest, dividends or bonuses paid within China
The deeming of such income as sourced in China allows the authorities to tax such income for both residents and non-residents receiving that income.

Next entry: Assessable Income in Australia
Previous entry: Accessing Double Tax Agreements

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