Policy Information

01 China's Individual Income Tax Policy for Foreigners

In the formulation of tax policies, China follows the "territorial principle" and "personal principle"

The Personal Income Tax Law of the People's Republic of China provides clear provisions: "Individuals who have a residence in China or have no residence but have resided in China for a cumulative period of 183 days in a tax year are considered resident individuals. Income obtained by resident individuals from within and outside China shall be subject to personal income tax in accordance with the provisions of this Law."

Simply put, China's individual tax law does not distinguish whether taxpayers are Chinese or foreign nationals, but only distinguishes between their residence status and duration within China.

Among them, as for the interpretation of "domicile", according to the provisions of Article 2 of the Regulations for the Implementation of the New Individual Income Tax Law in 2018, having a domicile in China means habitually residing in China due to registered residence registration, family and economic interests.

02 Basic Requirements for Applying for China Five Star Card

Chinese five-star card for employees

Having resided in China for a cumulative period of no less than three years for four consecutive years.

Market recognized Chinese five-star card

For four consecutive years, the actual residence in China shall not be less than six months per year.

Chinese Five Star Card for Couple Cluster:

1. Having stable residence in China.

2. Reside in China continuously for at least five years, and stay in China for at least nine months each year.

Family Cluster China Five Star Card:

1. Having stable residence in China.

2. Reside in China continuously for at least five years, and stay in China for at least nine months each year.

Chinese Five Star Card for Chinese Occupations:

For four consecutive years, the actual residence in China shall not be less than six months per year.

Chinese Five Star Card for Doctoral Positions

Holding a doctoral degree and certified by the Ministry of Education, working normally in a company and paying taxes.

In addition to the above-mentioned types of five-star cards, there are also application channels such as special contribution Chinese five-star cards, investment personnel Chinese five-star cards, and parent-child cluster Chinese five-star cards.

Requirements for Maintaining Chinese Five Star Card Identity

Chinese five-star card holders must have resided in China for a cumulative period of three months each year after obtaining a permanent residency permit.

If there are special circumstances, with the consent of entry and exit, one year of cumulative residence within five years is sufficient.

03 Conclusion

According to the definition of individual residents in China's individual tax law and the horizontal comparison of residency requirements in China's permanent residency system.

We can conclude that foreigners will not be subject to higher personal income tax in China just because they have obtained permanent residency status in China!

After all, permanent residency in China is a guarantee for the stable life and development of foreign nationals in China, and it is a manifestation of stable identity, which is not directly related to the increase or decrease of personal tax revenue for foreign nationals.