Step 1 — Are you a Chinese tax resident?
The first divide in Chinese individual income tax (IIT) is tax residency, not nationality. The core test: within a tax year (Jan 1 – Dec 31), have you been physically present in mainland China for an aggregate of 183 days or more (a full 24-hour stay counts as one day)?
183 days or more → you are a Chinese tax resident and, in principle, pay IIT on worldwide income. Fewer than 183 days → you are a non-resident individual taxed only on China-source income. Anyone with a "domicile" in China (habitual residence due to household, family or economic ties) is a resident regardless of days.
Resident vs non-resident: very different scope
Resident individuals are taxed on income from both inside and outside China — including salary paid by an overseas employer, overseas rental income and foreign investment gains.
Non-resident individuals are taxed only on China-source income; overseas income is generally out of scope. But non-residents are still subject to withholding and cannot use the resident-only annual reconciliation filing or certain deductions.
Two key reliefs: the 90-day and 6-year rules
90-day rule (non-resident): if you stay 90 days or less in a tax year and your China-source income is paid by an overseas employer and not borne by a China PE, that income is exempt (directors, supervisors and senior executives are excluded). This covers many short-term business visitors.
6-year rule (domiciled-less resident): a resident without a domicile who has met the 183-day threshold for fewer than six consecutive years can exempt foreign-source income paid by a foreign entity (subject to filing a record with the tax authority); a single departure exceeding 30 consecutive days in any year resets the consecutive count.
How salary income is calculated and paid
The most common route is withholding: your employer acts as withholding agent, deducting monthly and filing by the 15th of the following month. Comprehensive income is taxed on a 7-bracket progressive scale of 3%–45%.
A resident with overseas income must file an annual reconciliation between Mar 1 and Jun 30 of the following year; foreign tax paid can be credited (up to the China tax due). Non-residents do not file the comprehensive-income reconciliation.
Foreigner-specific: the 8 tax-free allowances are history
Historically, foreign individuals could opt for tax-free treatment of eight allowances (housing, language training, children's education, etc.). That policy ended on Jan 1, 2022 — foreigners must now claim the standard special additional deductions, the same as local residents, and can no longer stack the two.
Practical note: the first time you use the Individual Income Tax app or the e-tax bureau portal, you need a registration code from a tax service hall; your employer's HR usually helps.
Tax treaties: avoiding double taxation
China has signed double-taxation avoidance agreements with 114 jurisdictions. If your home country also has a treaty with China, you may self-assess and claim treaty benefits where eligible, keeping supporting documents on file.
When both China and your home country tax the same income, check the treaty first and keep foreign tax certificates for crediting.
CRS and FATCA: overseas accounts are no longer hidden
If you hold financial accounts overseas (e.g., in Hong Kong, Singapore or Switzerland), note CRS (Common Reporting Standard): China automatically exchanges financial-account information with 100+ jurisdictions, so your offshore deposits, securities, funds and cash-value insurance are reported back and reconciled against your filings.
In the first five months of 2026 alone, resident individuals repaid about ¥13 billion in under-reported overseas income — enforcement is now in active reconciliation. CRS 2.0 (from 2023) pierces through to the ultimate beneficial owner, so offshore structures, nominees and trusts no longer hide. The US is not a CRS member and does not auto-batch report back, but the US–China FATCA IGA and bilateral treaty channels still allow targeted exchange — "US accounts are invisible" is a myth. See our CRS & FATCA guide.
Crucially, obtaining overseas permanent residency or citizenship does NOT automatically make you a non-resident; tax residency turns on domicile and days of presence, not passport colour.
Common pitfalls
Pitfall 1: using a tourist visa to "avoid tax". A tourist visa does not permit legal work; it avoids lawful employment, not taxation — income earned by providing services in China can still be taxable.
Pitfall 2: assuming the tax authority cannot see overseas income. Under CRS and big-data reconciliation, offshore interest, trading gains and offshore dividends are all matched; failing to report means back tax plus late-payment penalties, and serious cases lead to audit.
Pitfall 3: parking assets in the US for safety. As noted, FATCA and targeted treaty exchange can still reach them.
Action checklist for foreigners in China
① Track your days of presence from entry and project whether you'll exceed 183; ② confirm with your employer the withholding and filing status (resident/non-resident); ③ if you meet 183 days but fewer than 6 consecutive years and want the foreign-income exemption, file a record with the tax authority in advance; ④ use the Individual Income Tax app for reconciliation (Mar 1 – Jun 30 next year); ⑤ keep foreign tax certificates and treaty documents; ⑥ report overseas accounts truthfully — no shortcuts.
For moving salary out of China or account-opening documents, see our cross-border remittance guide and step-by-step Alipay/WeChat setup series.
FAQ
I'm in China only a few months a year (under 90 days) — do I owe IIT?
If you are a short-term visitor, your China-source income is paid by an overseas employer and not borne by a China PE, it is generally exempt (90-day rule; directors/senior execs excluded). But income from independent services performed in China or other China-source income is still taxable. Between 90 and 183 days, as a non-resident you are taxed only on China-source income.
If I stay 183+ days, is my overseas income also taxed?
As a resident, worldwide income is in principle taxable. But a domiciled-less resident who has met 183 days for fewer than six consecutive years can exempt foreign-source income paid by a foreign entity (with filing), and a single departure over 30 days resets the count. Foreign tax credits also apply.
Can foreigners still enjoy tax-free housing/education allowances?
No longer. The eight tax-free allowances ended on Jan 1, 2022; foreigners now claim the standard special additional deductions (children's education, housing rent, mortgage interest, elderly care, etc.), the same as local residents.
Both China and my home country tax me — what do I do?
China has treaties with 114 jurisdictions. Check the treaty, claim benefits where eligible (e.g., lower withholding), and keep foreign tax certificates to credit against China tax (up to the China tax due) when filing.
Will CRS report my overseas accounts back to China?
Yes. China exchanges financial-account data with 100+ jurisdictions, and your offshore deposits, securities, funds and cash-value insurance are reported and reconciled. The US is not in CRS, but the US–China FATCA IGA and bilateral exchange can still reach it — don't assume US accounts are invisible. Overseas status doesn't auto-erase Chinese tax residency.
If I get overseas PR/citizenship, am I no longer a Chinese tax resident?
Not automatically. Tax residency turns on domicile and days of presence, not passport. With no domicile and fewer than 183 days in a year you are a non-resident; if you remain habitually resident or hit 183 days, you can still be a Chinese tax resident owing on worldwide income.
Do I report overseas trading gains and rental income to China?
If you are a resident, overseas income (trading gains, dividends, foreign rent) must be reported in the annual reconciliation between Mar 1 and Jun 30 of the following year, with foreign tax creditable. Non-residents generally report only China-source income.
