China Expats: No rise in tax threshold

The Shanghai Daily says:

THE income tax threshold of 4,800 yuan (US$744) enjoyed by expats in China will remain unchanged when personal tax thresholds are raised.

At present the threshold is 2,000 yuan with an extra 2,800 yuan for expats.

From September 1, China is raising the threshold to 3,500 yuan but the extra sum for expats is to be cut to 1,300 yuan, leaving them with the same 4,800 yuan benefit.

"We've received lots of inquiries from clients about the expatriate deduction," Freeman Bu, an Ernst & Young partner in Shanghai, said yesterday.

"They have argued that the cost of living is also rising for them as inflation is the same for Chinese and expatriates."

"The move is in line with China's aim to revise its tax law to let low and medium income families benefit from tax cuts," said Bu.

"Expatriates are often deemed as high-income earners."

Bu said that expats earning close to 18,000 yuan a month would pay more under the new tax system, which meant that "probably the majority of expatriates will have to pay more on tax." While for Chinese, those earning 38,600 yuan a month will pay more tax.

Read more: http://www.shanghaidaily.com/nsp/Business/2011/07/29/No%2Brise%2Bin%2Bexpat%2Btax%2Bthreshold/

Comments

[Diane Siriani]

Interesting article!
I just launched my own expatriate tax return service at www.expatriatetaxreturns.com