Personal Allowances – Foreign nationals working in China
The Individual Income Tax Law of the PRC allows deductions from certain categories of income in computing the individual income tax of foreign resident taxpayers, as follows.
| Taxable income | Deduction |
| Income from wages and salaries | RMB1,600 per month |
| Additional allowance on wages and salaries for foreign expatriates | RMB3,200 per month |
| Income from compensation for personal services, author’s remuneration, royalties or the lease of property: | |
| If the expenses amount to a single payment of not more than RMB4,000 | RMB800 |
| If the expenses amount to a single payment in excess of RMB4,000 | 20% |
Notes:
1. For income from compensation for personal services, author’s remuneration, royalties or the lease of property, the economic substance of a transaction will determine whether income received in several installments of not more than RMB4,000 each (and thus eligible for multiple RMB800 standard deductions) will be treated as a lump sum. If the installment payments are the result of a single economic transaction, they will be treated as a lump sum.
Actual expenses are not deductible against compensation for personal services, author’s remuneration, and royalties. A limited deduction is available for expenses incurred in connection with the lease of property.
2. Interest, dividends, bonuses on investments, contingent income, and other kinds of income are taxed on the gross amounts received, without deductions.