Living · Money
Taxes for expats
Individual Income Tax (IIT) basics
China's IIT is graduated, with rates from 3% to 45% on the comprehensive income brackets:
| Annual taxable income (CNY) | Rate | ||
|---|---|---|---|
| 0 – 36,000 | 3% | ||
| 36,001 – 144,000 | 10% | ||
| 144,001 – 300,000 | 20% | ||
| 300,001 – 420,000 | 25% | ||
| 420,001 – 660,000 | 30% | ||
| 660,001 – 960,000 | 35% | ||
| 960,001+ | 45% |
A standard deduction of ¥60,000 per year (¥5,000 per month) plus mandatory social insurance and housing fund contributions are subtracted before the bracket calculation.
Residency tests
- Non-resident: in China less than 183 days in the calendar year. Taxed only on China-sourced income.
- Resident: in China 183+ days in the year. Taxed on worldwide income, with significant relief in the first six years (the '6-year rule').
- 6-year rule: foreign nationals who become tax residents are not taxed on non-China-sourced income they don't remit to China for the first six consecutive years. If they leave China for 30+ continuous days within any of those six years, the count resets.
Most expats stay under the 6-year threshold by leaving for 30+ days in year five or six, resetting the clock.
Tax-treaty implications
Most major countries have a double-taxation treaty with China. The treaty typically determines:
- Which country has primary taxing right.
- Tie-breakers for dual-residency.
- Reduced withholding rates on dividends, interest and royalties.
Common treaties: USA, UK, France, Germany, Australia, Singapore, Hong Kong (separate), Canada.
Allowable deductions
Beyond the ¥60,000 standard deduction:
- Children's education (¥1,000/month per child).
- Continuing education (¥400/month).
- Mortgage interest on a primary residence (¥1,000/month).
- Rent (¥1,500/month in tier-1 cities, less elsewhere).
- Elderly parent support (¥3,000/month if you are an only child).
- Major medical expenses.
- Charitable donations (within limits).
These are in addition to the ¥5,000/month standard deduction.
Filing
The annual reconciliation (汇算清缴) runs March 1 to June 30 for the previous tax year. Most employees with a single employer have the IIT withheld at source and may not need to file. Self-employed, multi-source-income or expats claiming additional deductions file via the IIT app or with a tax adviser.
Departing China
Expats who leave permanently must file a final reconciliation before deregistering their tax ID. Final-month salary, bonuses, stock vesting and severance all count toward the year's IIT. Allow 4–6 weeks before your final exit for the process.