Statement on the Extension of China’s IIT Policy for Foreign Nationals
The four-year extension of the individual income tax (IIT) regime for foreign nationals, under which certain expenses—including housing, children’s education and language training—are treated as non-taxable, is very positive news. Having continually advocated this issue at all levels of government, the European Chamber believes the extension can help to stem the outflow of foreign talent that has taken place over the last few years. Announced on the margins of the start of the new school year, it will be extremely welcome news for families that have made the decision either to come to or remain in China.
This announcement comes on the heels of the Opinions of the State Council on Further Optimising the Foreign Investment Environment and Increasing Efforts to Attract Foreign Investment (Opinions). Given that the Opinions implied that an extension to China’s IIT regime for foreign nationals would be forthcoming, the European Chamber is hopeful that further concrete measures will now be taken to implement the other points contained in this document.
High-level advocacy actions on IIT taken by European Chamber this year include:
23rd March: European Chamber States’ Representative Peter Ling-Vannerus joined a Symposium with the Beijing Vice Mayor where he raised the IIT issue.
15th May: The Chamber sent an advocacy letter to the Minister of Finance Liu Kun on the importance of extending China’s IIT regime.
29th May: The Chamber sent a letter to the Chairman of CCPIT Ren Hongbin on the importance of extending China’s IIT regime.
26th June: The Chamber sent an advocacy letter to the Minister of Commerce Wang Wentao on the importance of extending China’s IIT regime.
• 24th August: European Chamber Secretary General Adam Dunnett joined a CCPIT Roundtable with CCPIT Chairman Ren Hongbin, where he outlined the importance of clarifying whether China’s IIT policy would be extended.