• Share

    Share via...

    • Facebook
    • WhatsApp
    • LinkedIn
    • Twitter
    • E-Mail
    • Pinterest
  • Client areaClient Login
  • EN
  • DE
  • Career
  • Home
  • About us
  • Audit
    • Audit and Assurance
    • Internal Audit and Compliance
    • Transaction Services
  • Legal & Tax
    • Corporate Governance
    • Mergers & Acquisitions
    • Employment Law
    • General Corporate Matters
    • Risk Advisory and Whistleblower
    • Tax Advisory
    • Tax Compliance Services
  • Bookkeeping
    • Accounting
    • Payroll
    • Treasury and secretarial services
    • Tax Filing
    • Financial Controlling
  • Team
  • News & Events
  • Locations

Ebner Stolz Asia

In this article

  • Intro
  • Policy updates
  • Contact person
Human Resources, Taxes

Tax alert: China’s IIT Preferential Policy for Expatriates Extended

By Eloise Yao August 31, 2023

In August 2023, the Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”) have released three regulatory circulars (Circular 25, Circular 29 and Circular 30) to extend the following Individual Income Tax (“IIT“) related incentives to the end of 2027. The move is intended to alleviate the IIT burden on China’s middle-income groups and expatriates.

Circular 29

Expatriates working in China can continue to enjoy tax exemption on eight categories of fringe benefits as follows till December 31, 2027. (The earlier rule was set to expire on December 31, 2023.)

  • Housing rental expense
  • Education expense for children
  • Language training expense
  • Meal fee
  • Laundry fee
  • Relocation expense
  • Business travel expense
  • Home visit expense

Such fringe benefits could be exempt from IIT provided that the expenses are reasonable in amount and supported by proper documents, such as invoices (fapiao). The reasonable ratio of the fringe benefits to the salary varies for different jurisdictions and needs to be determined by the management of the companies based on practical experience and consultation with the competent authority.

Circular 30

The preferential tax treatment for the annual one-time bonus is also extended until the end of 2027.  Under this scheme, IIT on annual one-time bonus is calculated and taxed applying the following formula, separately from the basic salary as the comprehensive income:

Tax payable on annual bonus = Taxable annual bonus amount x Applicable tax rate – Quick deduction

Circular 25

Another preferential IIT treatment applicable to the equity incentives of listed companies is also extended to the end of 2027.

With professional teams of HR & payroll experts located in Shanghai, Beijng and Jiangsu China, we have been providing extensive HR & payroll related tax advisory and compliance services to our clients.  

For more information and assistance, for example the documentation requirement for fringe benefits or the calculation of the annual bonus, please feel free to contact us.

How can we help you?

Eloise Yao

Director

  • +86 21 6330 9962, ext. 805
  • eloise.yao@cn.ebnerstolz.com
  • View Profile
  • All team members

News & events

All news & events

  • Download our year-end China law review January 8, 2025 by Catherine Yan
  • Trends & Developments in Chinese eCommerce December 16, 2024 by Dr. Gerald Neumann
  • Observation: Escalating Difficulties in Company’s Tax Refunds December 16, 2024 by Eloise Yao
  • General Financial Reporting When Doing Business in China December 16, 2024 by Lily Sun
  • Deepening China’s Legal Framework on Data Protection: from the Cybersecurity Law to the Regulations on Promoting and Regulating Cross-border Data Flows December 16, 2024 by Catherine Yan
  • event
    Conference wrapped up at Ebner Stolz’s New Office: “New Developments and Opportunities in the Chinese-German Investment Landscape. June 6, 2024 by Dr. Gerald Neumann
  • person
    A glimpse into the sprint phase of “Made in China 2025”: A German investor faces new demands for localization of imported products in the Chinese market June 4, 2024 by Dr. Nataliya Esakova & Sven Stuckmann
  • The EU Chamber of Commerce Survey: Enterprises struggle to cut down costs while China opens up further June 4, 2024 by Yvonne Zhang

Sign up for our newsletter to receive news and insights on business in China

Check your inbox or spam folder to confirm your subscription.

Representing you through 3 offices in China and Southeast Asia

Beijing
Bangkok
Shanghai
  • Shanghai
  • Bangkok
  • Beijing

Get in touch

  • Site Links
    • Home
    • About us
    • Team
    • News & Events
    • Career
  • Expertise areas
    • Audit and Assurance
    • Internal Audit and Compliance
    • Transaction Services
    • Corporate Governance
    • Mergers & Acquisitions
    • Employment Law
    • General Corporate Matters
    • Risk Advisory and Whistleblower
    • Tax Advisory
    • Tax Compliance Services
    • Accounting
    • Payroll
    • Treasury and secretarial services
    • Tax Filing
    • Financial Controlling
  • News & Events
    • All News & Events
    • Our Events
    • Accounting News
    • China News
    • Law News
    • Ebner Stolz News
    • HR News
    • Tax News
  • Follow us on linked.in
  • Imprint
  • Privacy Policy