RsA Asia - China Tax Guide 2021

RsA Asia has recently published 2021 primer to the Chinese Tax System, updated to reflect the ongoing reformations of the tax system. The Chinese tax system has developed in tandem with the remarkable economic growth of the country. The entry of China into the World Trade Organization (WTO) and the economic boom that has characterized recent years have made clear the necessity of overhauling the regulatory system in order to provide stability in the administration of the country, especially in the tax field. The desire of remaining the leader in the Asian area, keeping up with the major world powers, has led China to make numerous amendments to improve and adapt the tax system inline with the rapid expansion of the economy and at the same time, to provide for an attractive enviroment for foreign investment.

The most notable update in recent years for foreign enterprises is the reformation of the Individual Income Tax Law which was implemented on the 1st of January, 2019. This reform provided for a grace period of until 1st of January, 2022, for the allowance of extra deducations for expatriate workers. The main purpose of this reform was the harmonise the individual income tax and apply the same special deductions regardless of the individual being taxed.

Should you wish to read this Introduction to Chinese Taxation, hardcopies are freely available at all of RsA's events or can be obtained from our head office in Shanghai.

Table of Contents

1. Legislative background and tax reform

2. Sources of Chinese Tax Law

3. Tax classification

4. Individual income tax

5. Company income tax

6. Transfer pricing

Appendix I: China at a glance .

Appendix II: Tax Revenue

Appendix III: Double tax agreements signed by China

Main tax updates