China: Proposed individual income tax reform — the most significant revamp in 38 years.
www.gmsasia.pwc.com/[...]
The key changes that may affect individuals and/or companies in the global mobility arena include:
• Revising the criteria for determining tax residency status
• Implementing a mixture of aggregate and schedular taxation system to replace the current schedular taxation system
• Amending the tax rates and taxable income brackets
• Increasing the standard basic deduction and introducing additional specific deductible items
• Introducing a unique taxpayer identification number
• Introducing an anti-tax avoidance rule.
The proposed changes, if passed, will signify an overhaul of the current IIT system.
Thanks!
I hope they don't meddle with the 5 year rule for foreigners to become taxable on word-wide income, even if they decrease the annual threshold to be considered tax resident.
More information here:
home.kpmg.com/[...]
Search:
china IIT reform
The current 5 year rule
is manageable to avoid China domicile but I could not find any mention it would be retained or changed. The KPMG link above mentions the 5 year rule as an unknown item.
I am no longer concerned with China IIT but still get notices of changes and enforcement and will relay them if I get any.
More information on the IIT reform 2018:
"China's IIT Reform Nailed Down..."
www.pwccn.com/[...]
Five pages of, what I would call dense, reading. Good luck!
Is this a good idea or a bad idea? Why?
"Is this a good idea or a bad idea?" Kind of a dumb question. It is a change in China's tax law which must be complied with. This reform is entirely within the right and power of China's government to effect.
A wise man once told me, "In China never ask 'Why'" In China laws are laws and rules are rules the 'why' is less important than understanding and compliance.
This IIT Reform is the first major change in 38 years with many changes that affect both Chinese and foreigners. There are hundreds of 'whys'.
www.china-tax.net/[...]
given the piggybank of the social security in China is drying out, money, money, money...........
@rejected goods: I'm not sure this is going to Chinese social security, but maybe. Is Chinese social security piggybank in fact 'drying out' (? you mean 'up', right?)
both. drying up and drying out.
people are abusing the system. city people are abusing the system. they are buying luxury good on their "medicare" account for example. if you can read Chinese, you would find ad/"help" with contact number on the sidewalk/lamppost soliciting people to get cash from their "Medicare" account thru their services. hahahha.
@rejected: yeah, I understand that some people cheat, but do you mean it's good or necessary to nail down taxation? Anyway, is this social security the most important destination for cash from these proposed reformed tax procedures? How might they affect the overall distribution of wealth, for example?
