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Impact of Individual Income Tax Reform on Foreigners in China
The IIT reform workshop for foreigners in China was successfully concluded in Shanghai on 18 December. Deloitte Innovation Department is committed to promoting cross-border communications under the curtain of the global innovation trends and, thereby supporting the development of cross-border entrepreneur community as well as the communication among its players. This workshop is designed to help foreign individuals and companies in China analyze and identify the opportunities and risks derived from IIT reform, in favor of their entrepreneurship adapting to the relevant dynamics of China's tax reforms and updates.
The release of draft amendments to IIT law has sparked a heated discussion on how foreign individuals and companies should adapt to relevant changes. Taxpayers in China have started to see the influence of this reform since 1 October 2018, in particular the new tax rates and brackets. On top of that, the new amendments, which is to take full effect on 1 January 2019, will introduce tax residence rule, comprehensive income tax and filing cycle extension, etc. The changes are so drastic that this individual income tax reform is claimed as the biggest one since 1980. In the face of new tax rules, people from all walks of life, especially those expats working or living in China are greatly concerned about their obligations and seeking for professional advices. Given this pressing situation, let’s flash back to the IIT workshop to get deeper insights on the trends of individual income tax reform.
At the beginning of the workshop, Annie Yu, Innovation Department Senior Manager welcomed the guests and introduced Deloitte Innovation & Ecosystem service.
Then Tiffany Li, Global Employer Services Tax Director and Eve Yu, Senior Tax Manager shared the interpretations of China's IIT reform, spanning from its background, process and implementation to the nine key points of the Amendment and Draft Implementation Rules, including tax residence rule, tax categories, tax rates and brackets, standard deduction, additional itemized deductions, tax assessment, collection and filing, tax clearance upon emigration, different supporting departments, anti-avoidance rules and so on. They also highlighted potential impact of IIT reform on foreign individuals and companies, as well as the support that Deloitte can provide to help them get ready for related changes and risks.
Lastly, the guests and speakers had fruitful discussions about various important issues of IIT reform, which were highly welcomed by the participants.
In the future, Innovation Department will keep focusing on innovation trends and support cross-border communication within innovation ecosystem.