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Thread: Tax impact of a US citizen working in China
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[quote=LAWYERZHANG,395419]Just to add a few key points to the Individual income tax (hereinafter as "IIT") issue on question. Where to pay. Normally it's not a question up to your choice, but controlled by legal regulation(at least in China). The tax policy or treatment is mainly subject to your employment status: 1) if you do hold a position in a Chinese legal enterprise, you'll have to pay the IIT in China from the actual starting day of your employment. 2) if you do hold 2 posts concurrently for the same period (one in china and one abroad), you'll have to pay the IIT in China for the physical day you actually spent in China. In such cases, you could only come to china with a business visa. 3) If you're sent to China on an extended business trip, the IIT policy will varify if the total duration you spent in china within 1 calender year is over 183 days or not. over 183 day, to pay IIT for the whole year in China, any taxation paid already in the US or somewhere for the same period can be deducted accordingly. Notes: the deduction should not be more than the acutal taxation amount pursuant to chinese legal regulations. (i.e.:you're paid 5000 in the US as taxation, while you only have to pay 3000 pursuant to chinese regulations for the same taxed amount, only 3000 can be deducted. the rest 2000 can be deducted in no more than 5 years thereafter, if you continue to pay tax in China.[/quote]
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