China Extends Tax-Free Benefits for Expats Until 2027

The Ministry of Finance and State Administration of Taxation have jointly released the Announcement on the Renewal of the Implementation of the Individual Income Tax Policy on Allowances for Expatriate Individuals.

In order to further reduce the taxpayer's burden, the personal income tax policy on allowances and subsidies for foreign individuals is hereby announced as follows:

Foreign individuals who meet the individual conditions of residents can choose to enjoy the special additional deduction of individual income tax, or they can choose to follow the "Notice of the Ministry of Finance and the State Administration of Taxation on Several Policy Issues Concerning Individual Income Tax" (Cai Shui Zi [1994] No. 020), "National Circular of the State Administration of Taxation on the Execution of Individual Income Tax Exemption for Foreign Individuals Obtaining Relevant Subsidies (Guo Shui Fa [1997] No. 54) and "Notice of the Ministry of Finance and the State Administration of Taxation on the Exemption of Individual Income Tax for Foreign Individuals Obtaining Housing Subsidies in Hong Kong and Macao" ( Caishui [2004] No. 29) stipulates that the tax-free preferential policy of housing subsidies, language training fees, children's education fees, etc., but not at the same time. Once a foreign individual chooses, it cannot be changed within a tax year.

This announcement will be implemented until December 31, 2027.