On August 28, 2023, the Ministry of Finance (MOF) and the State Taxation Administration (STA) announced that the current preferential Individual Income Tax (IIT) policies for foreign individuals would be extended for four years to December 31, 2027. Originally, these policies were set to expire on January 1, 2024. In addition, the two entities also announced that all employee bonuses – for both foreign and Chinese nationals – will maintain their separate, preferential tax rates until the end of 2027.
AmCham China applauds these decisions, which help companies better retain and attract vital expatriate employees while efficiently managing operational costs. These policies not only incentivize foreign investment, but also ensure the engagement of top talent from both China and around the globe in this dynamic economy.
Over the past five years, AmCham China has persistently lobbied for the extension of non-taxable allowances for expatriate employees at both central and local government levels (see below for a list of our main activities). These non-taxable allowances (including housing, education, and language training) had been set to become fully taxable in 2024, which has consistently been identified as a top AmCham China member company concern.
AmCham China’s Tax Committee and the Government Affairs & Policy Team will continue to keep this issue as an advocacy priority in years to come, with a goal for further or indefinite extension of the current policy. As always, AmCham China will continue to work closely with our key government stakeholders on the issues that matter most to you and your companies.