The Chinese tax authority confirmed to the public, at short notice at the beginning of the new year, that the following decade-long preferential individual income tax (IIT) treatments, which should have ended on 31 December 2022, will continue for another year.
1. IIT benefits for stock-based rewards for employees
2. IIT benefits for the special programmes between the mainland and Hong Kong (HK)
3. New IIT treatments on bonuses and perks at work
The concern that the expatriates’ IIT burden might surge after 2023 may revive again. Expatriate employees in China, uncertain if the policy would be granted another period of renewal, would be put on edge again. If a renewal does not take place, the mentioned perks would be taxed for IIT at a rate much higher than that under the current policy, even though some minor deductions are still allowed.
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