Kunming Huayang Academy for Language and Culture

Forums

Proposed IIT Reform

rejected_goods (315 posts) • +2

people relying on social security payment in the northeast china have been experiencing problem receiving payment. and the government has been channelling social security reserve from wealthy regions.

if you are a contributor to the social security system, you would have found an extra 20 rmb deduction increase per month. in the rural area, medical treatment rebate are scaling back.

of course, the ongoing trade war is not helping. social security is not the only black hole, there are military expansion, increase investment in infrastructure to balance the shrinking export......there are only 4 aces in a deck of card, so to speak. hahhaha

Geezer (1840 posts) • 0

Some info on IIT Reform effective January 01, 2019

Not much new. Scroll down for China bullet points:
www.gmsasia.pwc.com/[...]

Major points:

"Not yet clear how the “5-year rule” will be affected. Could result in greater resistance to long-term
assignments due to higher worldwide tax exposures"

"Different tax systems for resident and nonresident individuals. More complicated tax compliance process going forward"

"Not yet clear on potential tax cost
impacts for foreigners enjoying the
existing non-taxable fringe benefits"

September 17, 2018 info:
www.pwc.com/[...]

JanJal (565 posts) • +1

There is no indication so far about it being tied to permanent residence.

But at least my common sense says, that if China wants to tax your global income, then the least it should do is to grant you all (however limited) opportunities that China provides to its own citizens.

JanJal (565 posts) • +2

China has two modes of "permanent" residence.

One is the "green card" type which in theory gives you same rights as natives, for example being employed without work permit requirements.

The other is "tax residency", which means that China has right to tax your global income, but this does not necessarily give yourself any benefits same way Chinese "green card" does.

We were originally only talking about the IIT reform's implications to the "tax residency". For which there are still many unknowns.

But my personal opinion is, that if it becomes so much easier to become "tax resident" in China (or so much more difficult to escape it), then China should also much further loosen the requirement for its "green card".

Geezer (1840 posts) • 0

@JanJal Your opinion sounds entirely reasonable to me. But in as much taxation is the government coercing you to part with money earned, and, if they can find a way to get more of your money earned worldwide cuz you choose to live in China the "green card" is not in play.

It used to be that "retirement income" from any source was not taxed in by China. With the limited information I have, I can not confirm this is still the case post reform.

Being a geezer, and accountant with two CPA sons, all of my retirement income is, with great satisfaction, tax free in the US. Going back to China is no longer attractive.

Geezer (1840 posts) • 0

@JanJal is correct as to the two different modes of "residence" in China. Do not confuse them or conflate them.

They are created by different ministries for different reasons. They are two entirely different games.

Login to post Register to post