China taxes: How much IIT do you have to pay?

China taxes How much IIT do you have to pay

The lowdown on China taxes for expats

After a long long discussion, Law of the PRC on Individual Income Tax (“IIT Law”) has finally been promulgated at June 30, 2011. According to the law, two types of expats should pay IIT:

  1. For expats who stayed within the territory of China more than one year, shall pay IIT for his income obtained in and/or outside the territory of China;
  1. for expats who does not stay within the territory of China or has stayed within the territory of China for less than one year, shall pay IIT for his income obtained within the territory of China.

Foreign employees should pay IIT according to the rates listed as following:

Grade Monthly Taxable Income Tax Rate (%)

1 income of 1,500 yuan or less 3

2 that part of income in excess of 1,500 to 4,500 yuan 10

3 that part of income in excess of 4,500 to 9,000 yuan 20

4 that part of income in excess of 9,000 to 35,000 yuan 25

5 that part of income in excess of 35,000 to 55,000 yuan 30

6 that part of income in excess of 55,000 to 80,000 yuan 35

7 that part of income in excess of 80,000 yuan 45

Note:

1. The monthly taxable income in this Schedule refers to the balance after deducting 3,500 Yuan and additional expenses from the monthly income;

2. the above mentioned additional expenses may be determined in light of the foreign taxpayer’s average income level, living standards and the change of exchange rates, the scope and standards for which shall be formulated by the State Council.

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