Announcement on the Individual Income Tax Policy for Foreign-sourced Income
Announcement on the Individual Income Tax Policy for Foreign-sourced Income
Announcement on the Individual Income Tax Policy for Foreign-sourced Income
Announcement of the Ministry of Finance and the State Taxation Administration [2020] No.3
January 17, 2020
In order to implement the Individual Income Tax Law of the People's Republic of China and the Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (the "Individual Income Tax Law and its Implementing Regulations"), the individual income tax policy for foreign-sourced income is hereby announced as follows:
I. The following income is income sourced from outside the territory of China:
1. income derived from the provision of labor services outside the territory of China, such as holding a post, being employed or performing duties;
2. income from author's remuneration that is paid and borne by enterprises and other organizations outside the territory of China;
3. income derived from the licensing for use outside the territory of China of any kind of licensing rights;
4. income related to production and operating activities derived from production and operating activities carried out outside the territory of China;
5. interest, dividend and bonus income derived from enterprises, other organizations and non-resident individuals outside the territory of China;
6. income derived from the leasing of property to a lessee for use outside the territory of China;
7. income derived from the transfer of real estate outside the territory of China, or the transfer of stocks, equities, and other equity assets (the "equity assets") formed from investments in enterprises and other organizations outside the territory of China, or the transfer of other property outside the territory of China; however, income derived from the transfer of equity assets formed from investment in enterprises and other organizations outside the territory of China shall be domestic-sourced income if at any time within the three years (36 consecutive calendar months) before the equity assets are transferred, 50% or more of the fair value of the assets of the invested enterprises or other organizations is derived directly or indirectly from real estate located in the territory of China;
8. incidental income paid and borne by enterprises, other organizations, and non-resident individuals outside the territory of China; and
9. if the Ministry of Finance and the State Taxation Administration have separate provisions, such provisions shall prevail.
II. A resident individual shall, in accordance with the provisions of the Individual Income Tax Law and its Implementing Regulations, calculate the amount of tax payable on his or her domestic-sourced income and foreign-sourced income in the current period according to the following methods:
1. the general income obtained by a resident individual from outside the territory of China shall be consolidated with his or her domestic-sourced general income for the purpose of calculating the tax payable;
2.
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Announcement of the Ministry of Finance and the State Taxation Administration [2020] No.3
January 17, 2020
In order to implement the Individual Income Tax Law of the People's Republic of China and the Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (the "Individual Income Tax Law and its Implementing Regulations"), the individual income tax policy for foreign-sourced income is hereby announced as follows:
I. The following income is income sourced from outside the territory of China:
1. income derived from the provision of labor services outside the territory of China, such as holding a post, being employed or performing duties;
2. income from author's remuneration that is paid and borne by enterprises and other organizations outside the territory of China;
3. income derived from the licensing for use outside the territory of China of any kind of licensing rights;
4. income related to production and operating activities derived from production and operating activities carried out outside the territory of China;
5. interest, dividend and bonus income derived from enterprises, other organizations and non-resident individuals outside the territory of China;
6. income derived from the leasing of property to a lessee for use outside the territory of China;
7. income derived from the transfer of real estate outside the territory of China, or the transfer of stocks, equities, and other equity assets (the "equity assets") formed from investments in enterprises and other organizations outside the territory of China, or the transfer of other property outside the territory of China; however, income derived from the transfer of equity assets formed from investment in enterprises and other organizations outside the territory of China shall be domestic-sourced income if at any time within the three years (36 consecutive calendar months) before the equity assets are transferred, 50% or more of the fair value of the assets of the invested enterprises or other organizations is derived directly or indirectly from real estate located in the territory of China;
8. incidental income paid and borne by enterprises, other organizations, and non-resident individuals outside the territory of China; and
9. if the Ministry of Finance and the State Taxation Administration have separate provisions, such provisions shall prevail.
II. A resident individual shall, in accordance with the provisions of the Individual Income Tax Law and its Implementing Regulations, calculate the amount of tax payable on his or her domestic-sourced income and foreign-sourced income in the current period according to the following methods:
1. the general income obtained by a resident individual from outside the territory of China shall be consolidated with his or her domestic-sourced general income for the purpose of calculating the tax payable;
2.
......