but dont assume the school or the accountant will bother with this. remember local interpretation . this is kunming, where they can make an omlet without breaking an egg and they can break eggs but still not make an omlet
Double taxation, as I understood it - was being taxed in both the country you work and your home country.
Technically, as long as one is paying taxes in a foreign country, with records to prove - one needn't pay tax in your home country, subject to the tax laws of your home country.
For US citizens working abroad (federal employees exempted), we're allowed over USD 90k in non-taxable salary (but you still have to file annual federal tax returns). Expat tax benefits are of course subject to IRS qualifications (330 days living overseas, etc ad infinitum).
I do NOT believe this means you can work in China and NOT pay tax in China. It merely potentially relieves your tax burden at home (paying taxes on taxes), with the appropriate official tax documentation.
The US and China executed a tax treaty in 1984 which, in Article 19, provides for US residents who live temporarily in China for the primary purpose of teaching, giving lectures or conducting research at a university, college, school or other accredited educational institution or scientific research institution shall be exempt from tax in China for a period not exceeding three years in the aggregate in respect of remuneration for such teaching, lectures or research:
www.irs.gov/pub/irs-trty/china.pdf
I successfully convinced four institutions to comply with the provisions of the tax treaty by providing a Chinese copy of the tax treaty. However, these days you are required, I believe, required to make application to avoid being taxed.
China has 102 tax treaties:
www.chinatax.gov.cn/eng/n2367756/index.html
I am reasonably sure the UK, OZ and NZ have an article similar Article 19 in the US-China treaty. Canada does not.
US taxpayers: The Foreign Earned Income Exclusion for 2017 is $102,100 providing you meet the requirements.
US taxpayers: here are a few other things to keep in mind:
- you still have to file, even if you make less than the exemption.
- you may still be on the hook for 'self-employed tax' for self-employed income.
- You may have to file a FinCEN form as well, and they're due on April 15 this year, instead of June 1.
So much fun being an overseas American...
@geezer. If i may ask on your post?
Which institutions did you convince to comply with the 1984 treaty? Any In Yunnan? Where to get the Chinese copy of the treaty? The link www.pwccn.com/[...] says page not found.
@Long-Dragon. None in Kunming. I taught at YUFE and they actually teach the tax treaty stuff.
In Beijing, CUFE and Beijing Royal School plus two other schools which no longer exist.
I got a copy, bilingual, from the State Administration of Taxation (SAT) website. I could not find the 1984 agreement.
PM me, I can help you.
