Early in 2008, expatriate employees in China with annual incomes in excess of RMB120,000 (about US$16,200) should complete an annual self-declaration to be submitted by the end of March ? at the latest ? for their income earned in the 2007 tax year. This annual self-declaration means such expatriates should complete and submit an Individual Income Tax Declaration Form to the local tax authority in addition to their regular routine monthly tax filings.

Who Is subject to annual self-declaration?

In accordance with The Implementing Rules of the Individual Income Tax Law of the People?s Republic of China and The Self-declaration Rules Concerning Individual Income Tax, taxpayers who meet any one of the following five conditions should file self-declarations of individual income taxes.

1. An annual income of more than RMB120,000
2. Income derived from two or more places inside the People’s Republic of China
3. Income derived partly or fully from sources outside the People’s Republic of China
4. Have received taxable income but not paid tax
5. Other conditions regulated by the State Council

A mandatory requirement even if taxes have been paid

In addition, if a person has derived an income of over RMB120,000 in the tax year, has paid the correct individual income tax, and has made self-declarations of his individual income tax to the tax authorities, in accordance with the self-declaration rules, they must still a complete self-declaration of their 2007 income to the tax authorities.

What information should be included in the individual income tax declaration form?

For individuals with an annual income in excess of RMB120,000, when reporting their income taxes after the end of the tax year, they should provide the following basic personal information: name, ID type and number, profession, employer, place of residence, address in China, post code and telephone number, as well as tax data such as the annual amount of any different sourced incomes, taxes payable, taxes prepaid and withheld, foreign tax credit and taxes owed or overpaid. In addition, foreigners should declare their nationality and date of arrival in China.

Where should the annual self-declaration be filed?

The self-declaration rules state that, for taxpayers with an annual income of over RMB120,000 declaration of individual income taxes shall be made as follows:

• taxpayers employed within China should make their declarations at the local tax authorities of the place where their employers are located
• taxpayers with two or more employers within China should make the declaration at a fixed local tax authority in the place where one of the employers is located
• taxpayers with no employer in China, and whose annual incomes include incomes from production or business operations by individual households engaging in industry and commerce, or incomes from contracting or leasing operations of enterprises or institutions (hereafter referred to as incomes from production or business operation), should make the declaration at local tax authorities in the place where one of these businesses are resident
• taxpayers who have no employer in China, and whose annual incomes include no incomes from production or business operation, should make the declaration at local tax authorities in their place of their residence registration.

Next :
China?s annual audit regulations and business license renewal



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