SAT Tightens Up Expatriate Payment of Individual Income Tax
According to new regulations issued by the SAT, "Strengthening the Administration of the IIT Files of Expatriates", on 23 January 2006, the authorities are taking an even greater interest in expatriates and their IIT obligations.
Local tax bureaus now establish a separate file for each expatriate. This file includes the following information, and is compiled from a variety of sources, including immigration, the public security bureau (from your hotel check-in) and other pertinent departments and work units :
- Name (in Chinese and as appears in your passport)
- Full identity details as appear in your passport including the number, issuing country, your China visa number and status
- Gender
- Place of birth (in Chinese and in English)
- Date of birth
- Overseas residence address (in Chinese and in English)
- Name of the employer
- Nationality
- Position
- Duration of employment in China
- Dates of entry and exit
- Address of residence in China
- Phone number
- Zip code
- Amount of income
- Place of payment
- Name of withholding agent
- Reported income amount
- Tax liability
- Tax already paid
- Date of deposit in the state treasury
The SAT has developed an IT system to keep track of the tax withholding records, and the information can be shared among government agencies, such as the police, courts, administrative bureau of industry and commerce, banks, finance bureau, labor bureau, audit bureau, and foreign exchange administrative bureau, as well as customs and immigration. There have been cases of expatriates apprehended at immigration attempting to leave China without having settled their dues with the tax bureau if they have been highlighted as potential tax evaders.
In late September 2006, the SAT also announced that it is also to strengthen the management of income tax collection from people with annual incomes of more than RMB120,000. While not specifically directed at expatriates, this may impact even expatriates with average incomes.
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