Taxes in China in 2026 for foreigners and business
From 1 September 2026 foreign owners of Chinese companies pay 20% on dividends for the first time in 32 years, and since 1 January the country has had its first VAT law. A full guide to 2026 taxes for foreigners and business: salaries on the 3-45% scale, social security, corporate tax, VAT, property, residency and the treaty with Russia.
In short: in 2026 China taxes a resident's salary at 3% to 45% after a CNY 60,000 yearly allowance, charges 13% VAT on most goods and 25% corporate tax, while small businesses pay 5% on profit and 1% VAT until the end of 2027. For their first six years of residence foreigners pay no Chinese tax on most foreign income, and the double tax treaty with Russia is in force and has not been suspended.
Tax rates in China in 2026: the short version
China taxes salaries at anything from 3% to 45%, and its top rate is double Russia's 22% ceiling. Few people reach it, though: 45% applies only above CNY 960,000 a year, about $150,000, while a salary of CNY 20,000 a month loses less than 6% to income tax.
The main taxes in mainland China are individual income tax (IIT), enterprise income tax on company profits and VAT (value added tax). From 1 January 2026 VAT is governed by a law passed by the national legislature for the first time, replacing a provisional government regulation. Taxes are collected by the State Taxation Administration (STA), China's national tax authority.
The yuan (CNY, officially called renminbi) traded at about 6.7-7 to the US dollar in 2026, and at 10.4-12.9 rubles under the Bank of Russia rate. For simplicity, the examples below use CNY 6.8 = $1.
| Tax | 2026 rate | Who pays and on what |
|---|---|---|
| Income tax on salaries and fees | 3-45% | Residents, on an annual scale after a CNY 60,000 (~$8,800) yearly allowance |
| Income tax on individual business income | 5-35% | Business profits of individuals |
| Dividends, interest, rent, sale of property | 20% | Individuals; residential rent 10%, bank deposit interest 0% |
| Social security | about 10.5% + 24-27% | Employee and employer, rates vary by city; mandatory for foreigners with a work permit |
| Corporate income tax | 25% | Most companies; high-tech enterprises 15% |
| Corporate tax for small businesses | 5% | Profit up to CNY 3 million, up to 300 staff, assets up to CNY 50 million; until the end of 2027 |
| VAT | 13%, 9%, 6% | Goods 13%; transport, construction, real estate, basic produce 9%; most services 6% |
| VAT for small businesses | 1% | Turnover up to CNY 5 million a year; no VAT up to CNY 100,000 a month; until the end of 2027 |
| Withholding tax for foreign companies | 10% | Dividends, interest, royalties; under the Russia treaty 5-10%, 0% and 6% |
| Tax on buying property | 1-5% | Buyer; first or second home up to 140 m² - 1% |
| Tax on buying a car | 10% | Buyer; electric cars and plug-in hybrids 5% in 2026-2027 |
| Inheritance and gifts | 0% | No separate tax |
If an old reference book quotes 17% or 16% VAT, those rates are out of date: 17% applied until May 2018 and 16% until April 2019. The standard rate has been 13% since then.
Hong Kong and Macau have their own tax laws, so everything on this page refers to mainland China only. For the neighbouring system with a 15-16% cap on salaries tax and no VAT, see taxes in Hong Kong. To compare China with other countries, see our overview of taxes by country.
We will calculate online the tax on your income and show how to pay less legally.
Compare taxes in 146 countries: relocation taxes 2026
Who is a tax resident in China: the 183-day and six-year rules
China is more generous than most countries to foreigners with income abroad: for the first six years of residence, foreign dividends, interest and share gains paid from outside China are not taxed there. Worldwide income comes into the net only in the seventh consecutive year.
The basic rule sits in Article 1 of the PRC Individual Income Tax Law. A resident is anyone with a domicile in China (habitual residence based on household registration, family and economic ties) or anyone who spends 183 days or more in the country in a calendar year. Foreigners almost never have a Chinese domicile, so for them it comes down to counting days.
A day counts only if the full 24 hours were spent in China. Arrival and departure days do not count, and neither do short trips of under a day.
| Time in China | What China taxes |
|---|---|
| Up to 90 days a year (up to 183 days for citizens of treaty countries, including Russia) | Only pay for work in China that a Chinese company pays or bears; salary from a foreign employer is exempt |
| From 90 (or 183) to 183 days | All pay for days worked in China, whoever pays it; foreign income is not taxed |
| 183 days or more, fewer than 6 years in a row | All Chinese income plus foreign income paid by Chinese entities; other foreign income is exempt |
| 183 days or more for 6 years in a row with no trip abroad longer than 30 days | Worldwide income: salary, dividends, interest, sales of shares and property abroad |
How to reset the six-year clock
The count starts from 2019, when the current version of the law took effect. The clock resets if, in any year, a foreigner spends fewer than 183 days in China or makes a single trip abroad of more than 30 consecutive days. In practice, one 31-day stay outside China within the six-year window restarts the count and keeps the exemption for foreign income.
The exemption is not automatic: it has to be claimed in the tax filing. How countries count 183 days, and why it is possible to be resident in two countries at once, is covered in our article on tax residency and the 183-day rule.
Visa-free entry for Russians does not allow work
Since 15 September 2025 Russian citizens can enter China without a visa for up to 30 days, and the Chinese Ministry of Foreign Affairs has extended this regime until 31 December 2027. That covers tourism and business trips, but employment requires a work permit and a work-type residence permit.
China tax residency rules: how to count days and confirm your status
In China, the day you land and the day you fly out do not count towards residency. Announcement No. 34 of 2019 of the Ministry of Finance and the tax administration counts only days spent in the country in full, so a Monday-to-Friday business trip gives three days, not five. Chinese day counting is stricter than a fitness tracker: it simply ignores half steps.
The threshold is 183 days in a calendar year. A resident pays 3-45% income tax, but for the first six years foreign income paid from abroad is not taxed in China. A shorter year or one trip abroad over 30 days resets the six-year clock. The calculator below counts days by the full-day rule.
The law does not stop you from confirming the status on your own. But mistakes cost more: a sixth year without a 31-day trip opens tax on worldwide income, and one extra day in China can make you resident in two countries at once. Murblz support removes these risks: we count days, plan trips, obtain the residency certificate and apply double tax treaties where they are in force. We guarantee professional work and a transparent process, and in most cases a result on the first filing.
183-day calculator
Tax residency calculator for China
Enter your travel dates: the calculator shows whether you are a tax resident of China today and at year end, and how many days are left before the threshold.
Counting by dates needs JavaScript. Below are the same rules by country.
China income tax rate on salary: the 3-45% scale and a worked example
China runs one of the most progressive income taxes in the world, with seven brackets from 3% to 45%. In return, the first CNY 60,000 a year, about $8,800, is tax free, and deductions for children, mortgage interest and elderly parents shrink the tax base further.
Residents pay tax on comprehensive income: salary, fees for one-off services, author's fees and royalties. Tax is calculated for the year, and the employer withholds it every month on a cumulative basis.
| Annual taxable income, CNY | Rate | Approx. in USD |
|---|---|---|
| up to 36,000 | 3% | up to 5,300 |
| 36,000 - 144,000 | 10% | 5,300 - 21,200 |
| 144,000 - 300,000 | 20% | 21,200 - 44,100 |
| 300,000 - 420,000 | 25% | 44,100 - 61,800 |
| 420,000 - 660,000 | 30% | 61,800 - 97,100 |
| 660,000 - 960,000 | 35% | 97,100 - 141,200 |
| over 960,000 | 45% | over 141,200 |
Non-residents use the same scale split into months: 3% on the first CNY 3,000 a month after a CNY 5,000 monthly allowance, and 45% above CNY 80,000 a month. They get no special deductions.
Which deductions reduce the tax
On top of the basic CNY 5,000 a month, residents deduct their own social security and housing fund contributions plus the special additional deductions. The amounts were raised in 2023.
| Deduction | Amount |
|---|---|
| Basic allowance | CNY 60,000 a year (5,000 a month) |
| Children's education | CNY 2,000 a month per child |
| Care of a child under 3 | CNY 2,000 a month per child |
| Support for elderly parents | up to CNY 3,000 a month |
| Mortgage interest on a first home | CNY 1,000 a month |
| Rent | CNY 800, 1,100 or 1,500 a month depending on the city |
| Continuing education | CNY 400 a month, or CNY 3,600 in the year a certificate is obtained |
| Serious illness | up to CNY 80,000 a year above CNY 15,000 of own spending |
| Private pension | up to CNY 12,000 a year |
The expat perk: tax-free housing and school fees
Foreigners have a choice Chinese citizens do not: instead of the special deductions, they can receive tax-free reimbursements from the employer for rent, children's education, language classes, meals, laundry, relocation, business travel and home leave trips. The amounts must be reasonable and backed by fapiao (发票), the official electronic tax invoices issued by sellers. Reimbursements and special deductions cannot be combined. The Ministry of Finance and the STA have extended this relief until 31 December 2027.
The difference can be large. Worked example: a Shanghai or Beijing flat rented for CNY 15,000 a month and paid as a reimbursement takes CNY 180,000 a year out of the tax base. The rent deduction is worth at most CNY 18,000.
A second concession also runs until the end of 2027: the annual bonus can be taxed separately from salary using the monthly scale, which often lowers the total bill on a large bonus. Dividends, interest, rental income and property sales stay outside the annual scale and are taxed at 20%.
How much tax on a salary in China: a worked example
Worked example for a resident: a salary of CNY 20,000 a month (about $2,900) in Shanghai, with no special deductions and no reimbursements. Employee contributions in Shanghai are 10.5%: 8% pension, 2% medical and 0.5% unemployment insurance.
| Item | Per year, CNY |
|---|---|
| Gross salary | 240,000 |
| Employee social security, 10.5% | -25,200 |
| Basic allowance | -60,000 |
| Taxable income | 154,800 |
| Income tax: 3% on 36,000 + 10% on 108,000 + 20% on 10,800 | 14,040 |
| Take-home pay | 200,760 (16,730 a month) |
Income tax comes to 5.85% of the salary, and all deductions including contributions to 16.4%. Because of cumulative withholding, the January payslip shows CNY 387 of tax and the December one CNY 2,370. One school-age child adds a CNY 24,000 yearly deduction and cuts the tax to CNY 10,560.
On top of the salary, a Shanghai employer pays about another 25.5%: 16% pension, 9% medical and 0.5% unemployment insurance, roughly CNY 5,100 a month, plus a small work injury premium.
For comparison, the same income in Russia, 3 million rubles a year at 12.5 rubles per yuan, carries personal income tax of 402,000 rubles, about 13.4%, and only the employer pays social contributions. So Chinese income tax on a middle salary is less than half the Russian level, but once contributions are included the employee in China takes home slightly less.
What social security contributions foreigners pay in China
Social security costs Chinese employers more than income tax: on an average salary the employer adds about a quarter on top, and the employee gives up about another 10%. Foreigners have been required to take part since 15 October 2011, when the Interim Measures on social insurance for foreigners employed in China took effect.
An agreement with the employer to skip contributions does not work. The Supreme People's Court interpretation on labour disputes in force since 1 September 2025 (Article 19) declares void any agreement or employee waiver releasing the employer from social insurance. If the employer has not paid, the employee may resign and claim severance.
| Insurance | Employee | Employer |
|---|---|---|
| Pension | 8% | 16% |
| Medical (including maternity) | 2% | 9% in Shanghai, 9.8% in Beijing, 6.85% in Guangzhou |
| Unemployment | 0.5% (0.2% in Guangzhou) | 0.5% (0.8% in Guangzhou) |
| Work injury | 0% | 0.2-1.9% depending on the industry |
| Housing Provident Fund | 5-12% | 5-12% |
Contributions are not charged on the full salary: the base is capped at 300% of the city's average wage, so the real burden for well-paid expats is lower than the table suggests. The housing fund is mandatory for Chinese citizens, while the rules for foreigners depend on the city.
What happens to pension contributions on departure
A foreigner leaving China for good can close the insurance and take the balance of the personal pension account as a lump sum. Only the employee's own 8% goes into that account, though. The employer's 16% stays in the pooled pension fund and is not refunded.
Social security agreements prevent double contributions. China has them with 13 countries: Germany, South Korea, Denmark, Finland, Canada, Switzerland, the Netherlands, France, Spain, Luxembourg, Japan, Serbia and Kyrgyzstan (since 14 October 2025). Russia is not on the list, so a Russian on a Chinese employment contract pays full contributions in China.
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Corporate income tax and dividends in China
China's standard corporate income tax rate is 25%, the same as Russia's since 2025. Small businesses pay a fifth of that: 5% on profit up to CNY 3 million, about $440,000, and the relief runs until 31 December 2027.
Enterprise income tax is paid by every company registered in China, including the Wholly Foreign-Owned Enterprise (WFOE), a company with 100% foreign capital and the most common vehicle for foreign-owned business. A resident company is taxed on its worldwide income.
| Who pays | Rate | Conditions and term |
|---|---|---|
| Most companies | 25% | Standard rate |
| Small low-profit enterprises | 5% effective | Taxable profit up to CNY 3 million, up to 300 staff, assets up to CNY 50 million; until 31.12.2027 |
| High and New Technology Enterprises (HNTE) | 15% | Status renewed every three years: patents, a minimum share of R&D spending and of technical staff |
| Encouraged industries in the western regions | 15% | Until 31.12.2030 |
| Companies in the Hainan Free Trade Port with real operations on the island | 15% | Encouraged industries, until 31.12.2027 |
| Software and chip developers | 0%, then 10% or 12.5% | Tax holidays, then a reduced rate once certified |
The small business relief has a cliff edge. Worked example: at a profit of CNY 3 million the tax is CNY 150,000. At CNY 3.1 million the company loses the status entirely and pays 25% on the whole amount, CNY 775,000. The extra CNY 100,000 of profit costs CNY 625,000 in tax.
Most companies deduct R&D spending twice over, and losses carry forward for 5 years, or 10 for high-tech enterprises.
How dividends are taxed
Dividends between Chinese companies are tax free. When profit goes abroad, the company withholds 10%; under the treaty with Russia the rate is 5% if a Russian company holds at least 25% of the capital and has invested at least EUR 80,000, and 10% otherwise. Chinese individual shareholders pay 20% on dividends.
From 1 September 2026 foreigners who own foreign-invested companies pay the same 20%. Joint Announcement No. 27 of 2026 by the Ministry of Finance and the STA abolished the relief that had kept such dividends tax free since 1994. What matters is the actual payment date: dividends approved earlier but paid after 1 September fall under the new rules. For a Russian tax resident, the treaty cuts the rate to 10%.
Since 2025 the state also rewards foreign investors for reinvesting. On 27 June 2025 the Ministry of Finance, the STA and the Ministry of Commerce introduced a tax credit of 10% of profits that a foreign investor puts back into encouraged industries in China. The credit offsets future withholding tax on dividends, interest and royalties. The rule covers 1 January 2025 to 31 December 2028, and the investment must be held for at least five years.
Murblz specialists handle company registration in China and the choice of tax status: see company registration in China, and for bank accounts of a Chinese company, business accounts in China.
China VAT in 2026: the new law, rates and thresholds
Since 1 January 2026 condoms and contraceptive pills in China carry 13% VAT, after being exempt since 1993. That is how the new PRC Value Added Tax Law, adopted on 25 December 2024, reflects the shift in population policy: nurseries and kindergartens, elderly care homes, disability services and marriage agencies became exempt instead.
The law replaced the provisional regulation of 1993, and the details are set out in the implementing regulations adopted by State Council Decree No. 826 of 25 December 2025. The rates did not change.
| What is sold | Rate |
|---|---|
| Goods, imports, repairs, leasing of equipment and vehicles | 13% |
| Transport, postal services, construction, sale and lease of real estate, farm produce, water, gas, books | 9% |
| Most services: IT, consulting, finance, advertising, sale of intangible assets | 6% |
| Exports of goods and some services consumed entirely abroad | 0% |
| Small businesses on the simplified method | 3%, 1% until the end of 2027 |
Local surcharges come on top of VAT: urban construction tax (7% of the VAT amount in cities, 5% in counties, 1% elsewhere) and two education levies of 3% and 2%. In a city that adds 12% of the VAT due.
At what turnover VAT applies
The general taxpayer threshold is CNY 5 million, about $740,000 of sales over 12 months. Below it, a company counts as a small-scale taxpayer: it pays 3% of turnover with no input credit, cut to 1% until 31 December 2027. With sales of no more than CNY 100,000 a month or 300,000 a quarter, no VAT is due at all.
Above CNY 5 million, registering as a general taxpayer is mandatory. A general taxpayer charges the full rate but deducts suppliers' VAT and can issue special fapiao, which large buyers need for their own deduction.
VAT on foreign services and exports
When a Chinese company buys a service from a foreign one and the service is consumed in China, the Chinese payer withholds the VAT, usually 6%, and pays it to the budget. For Russian IT and consulting suppliers this means VAT comes out of the payment, and for licences and royalties withholding tax as well.
Exporters reclaim input VAT at refund rates from 0% to 13% depending on the product. The state uses the refund as a policy lever: from 1 April 2026 the refund for solar panels and related products was abolished, the battery refund fell from 9% to 6%, and it disappears on 1 January 2027.
How tourists get a VAT refund
Under rules announced on 27 April 2025, China simplified tax free shopping for foreign tourists: the minimum purchase is CNY 200 in one shop on one day instead of 500, and up to CNY 20,000 can be refunded in cash. The refund on ordinary goods is 11% of the price. Money is paid out on departure, and in some shops in large cities such as Shanghai, Beijing, Guangzhou and Shenzhen, right at the till.
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Taxes for sole traders, freelancers, IT and expats in China
A foreigner cannot register as a sole trader in China: the individual business status (getihu, 个体工商户, an individual industrial and commercial household) is open under the registration rules only to Chinese citizens, including residents of Hong Kong, Macau and Taiwan. A foreign entrepreneur needs a company, usually a WFOE.
The good news is that a small WFOE pays almost like a simplified regime. Worked example: a consulting company with CNY 3 million of annual turnover and CNY 600,000 of profit pays about CNY 30,000 of VAT at 1% and CNY 30,000 of corporate tax at 5%, plus local VAT surcharges. Both reliefs run until the end of 2027. The bigger costs are bookkeeping, the mandatory annual audit and social contributions for staff.
| Regime | Rate | Who it suits |
|---|---|---|
| WFOE as a small enterprise | VAT 1% + corporate tax 5% | Small trading, consulting or IT business with turnover up to CNY 5 million |
| WFOE with high-tech status | Corporate tax 15% | IT and manufacturing with patents and R&D spending |
| Hainan Free Trade Port | Corporate tax 15%, income tax capped at 15% | Companies in encouraged industries and specialists living on the island 183 days a year |
| Guangdong-Hong Kong-Macao Greater Bay Area | Income tax effectively 15% | Foreign specialists in 9 cities of Guangdong province |
| Expat reimbursements | 0% on housing, school, language | Foreign employees of Chinese companies, until the end of 2027 |
| Sole trader (getihu) | 5-35% | Chinese citizens only |
Freelancers and digital nomads
China has no special regime for freelancers or digital nomads. Employment requires a work permit and a work-type residence permit, and China issues no remote work visa of the kind Thailand or Indonesia offer. For remote work in Asia, see taxes in Thailand and taxes in Vietnam.
Grey schemes with payments to a personal card are getting riskier. Since 20 June 2025 State Council Decree No. 810 on tax information reporting by internet platforms has been in force. Marketplaces, ordering services and gig platforms report the identity and income of sellers and workers to the tax authority every quarter; the first reports went out in October 2025. Income of couriers, drivers and domestic workers is not reported if they owe no tax or enjoy a tax exemption.
Relief for specialists in the Greater Bay Area and Hainan
In 9 Greater Bay Area cities, including Guangzhou and Shenzhen, the Guangdong and Shenzhen authorities refund to qualifying foreign high-end and shortage specialists the difference between Chinese tax and tax under Hong Kong rules. The subsidy is tax free, and the scheme has been extended until 31 December 2027.
In Hainan, income tax above 15% is waived for selected specialists; the Ministry of Finance and the STA extended the relief to the end of 2027. The condition is 183 days a year on the island. Since August 2025 business trips and holidays off the island count towards that period, but at least 90 days must be spent physically in Hainan.
Property, car, inheritance, stock and crypto taxes in China
Almost nowhere in China is there an annual tax on an owner-occupied home: a national residential property tax has been debated for more than a decade, but it exists only in two pilot cities, Shanghai and Chongqing, since 2011. Buying and quick resales, on the other hand, are expensive.
| Situation | Tax in 2026 |
|---|---|
| Buying a first or second home up to 140 m² | Deed tax 1% |
| Buying a home over 140 m² | 1.5% for a first home, 2% for a second |
| Buying other real estate | 3-5% depending on the province |
| Selling a home owned for less than 2 years | VAT 3% of the full sale price (5% before 2026) |
| Selling a home owned for 2 years or more | No VAT |
| Income tax on a sale | 20% of the gain, or 1-3% of the price if costs cannot be proven; 0% for the family's only home owned 5 years or more |
| Renting out a home | Income tax 10% after deducting CNY 800 or 20% of expenses |
| Commercial property | Property tax 1.2% a year of original cost less 10-30%, or 12% of rental income |
| Owning a home (outside the pilots) | No annual tax |
The cut in VAT on quick resales from 5% to 3%, and the exemption after two years of ownership across the whole country including Beijing, Shanghai, Guangzhou and Shenzhen, were set by the Ministry of Finance and the STA from 1 January 2026. The reduced 1% deed tax for homes up to 140 m² has applied since 1 December 2024.
A foreigner can usually buy only one home in China, only for own use, and only while working or studying in the country; local rules vary. On investing in Chinese real estate, see investment property in China.
Car taxes
Vehicle purchase tax is 10% of the price excluding VAT. Electric cars and plug-in hybrids pay half, 5%, in 2026-2027, with the relief capped at CNY 15,000 per car; in 2024-2025 they were exempt up to CNY 30,000. The annual vehicle tax depends on the engine size of a passenger car and ranges from CNY 60 to 5,400 a year. Pure electric cars are exempt.
Inheritance, gifts, shares and crypto
China has no inheritance or gift tax. The exception is a gift of real estate to someone other than a close relative: the recipient pays 20% income tax.
Individuals currently pay no tax on gains from selling shares on the Shanghai and Shenzhen exchanges, and the seller pays 0.05% stamp duty on the trade. Dividends on those shares are taxed by holding period: over a year 0%, a month to a year 10%, under a month 20%. A resident's gains on foreign exchanges are taxed at 20%.
Crypto trading and mining are banned in China under 2021 notices from the People's Bank of China and other agencies, and there are no specific tax rules for crypto. Tax authorities may treat a resident's gains from selling crypto assets as income from the transfer of property taxed at 20%.
Taxes for non-residents and the China-Russia tax treaty
The double tax treaty between Russia and China is in force and has not been suspended. Russian Presidential Decree No. 585 of 8 August 2023 froze key provisions of tax treaties with 38 countries Russia considers unfriendly, but China is not on that list.
The current treaty was signed in Moscow on 13 October 2014, replacing the 1994 agreement, amended by a protocol of 8 May 2015, entered into force on 9 April 2016 and applies to income from 1 January 2017. Hong Kong has a separate treaty with Russia, also applied since 2017.
| Income from China | Rate under Chinese law | Under the Russia treaty |
|---|---|---|
| Dividends to a Russian company holding at least 25% with an investment of at least EUR 80,000 | 10% | 5% |
| Other dividends, including to individuals | 10% for companies, 20% for individuals (foreigners from 1 September 2026) | 10% |
| Interest on loans | 10% for companies, 20% for individuals | 0%, taxed only in the recipient's country |
| Royalties and licence fees | 10% for companies | 6% |
| Non-resident's salary for work in China | 3-45% on the monthly scale | 0% if in China up to 183 days, the employer is not Chinese and the cost is not borne by its Chinese establishment |
To get the treaty rate, the recipient proves Russian tax residency with a certificate from the Federal Tax Service, and the Chinese payer claims the relief itself. Without the certificate the full rate is withheld, and reclaiming the overpayment is harder.
Withholding tax for foreign companies
A foreign company without a presence in China pays Chinese tax only on passive income: 10% on dividends, interest, royalties and sales of stakes in Chinese companies, withheld by the Chinese side. If it has a permanent establishment, such as an office or a long project, the establishment's profit is taxed at 25%.
Working remotely for a Russian employer from China
This is an easy way into double taxation. Since 2024 the Russian Tax Code treats salary under an employment contract with a Russian company as Russian-source income even when the work is done abroad, and tax is withheld at 13-15%. China, meanwhile, taxes income for work physically performed on its territory.
The treaty gives the right to tax salary to the country where the work is done if the employee is resident there. In practice this needs a Chinese tax residency certificate issued by the Chinese tax authority, and the Russian employer's position is worth agreeing in advance. More on changing residency in our article on how the 183-day rule works.
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China tax filing deadlines and penalties
Every day of late tax payment in China costs a surcharge of 0.05%, more than 18% a year, and non-payment is fined at between half and five times the unpaid tax. These are Articles 32 and 63 of the PRC Law on the Administration of Tax Collection.
The employer withholds tax on salary every month. A resident files the annual return personally when tax is owed or refundable, or when there is income from abroad. The easiest way is the tax authority's Individual Income Tax app (个人所得税 App).
| What to file | Deadline |
|---|---|
| Income tax withheld from salaries | Employer, by the 15th of the following month |
| Annual income tax return (reconciliation) | 1 March to 30 June of the following year |
| Return on income from abroad | 1 March to 30 June of the following year |
| VAT | Monthly or quarterly, by the 15th of the following month |
| Corporate tax prepayments | Quarterly, within 15 days of the quarter end |
| Annual corporate tax return | By 31 May of the following year |
If the year-end result is a top-up payment, the reconciliation can be skipped when annual income is up to CNY 120,000 or the top-up is up to CNY 400, but only if the employer withheld correctly. The tax authority can reassess 3 years back for errors, 5 years for underpayments above CNY 100,000, and without time limit for evasion.
Foreign income in the spotlight
Since spring 2025 tax authorities in Zhejiang, Hubei, Shandong and Shanghai have been sending residents self-review notices on foreign income, and in January 2026 the State Taxation Administration urged residents to review their foreign earnings for 2022-2024: salaries, interest, dividends and gains on shares. China receives data on foreign accounts under the international automatic exchange standard CRS (Common Reporting Standard).
For a foreigner, the six-year rule shields foreign income from tax, but only if it is claimed correctly. Tax debts are also dangerous on departure: under Article 44 of the same law, the tax authority can ask border control to stop a debtor leaving China until the debt is paid or secured.
Taxes in China vs Russia: comparison and what it means for relocation
On a middle salary China takes less income tax than Russia; on a high one, twice as much. China's VAT has been 9 percentage points below Russia's since 2026, and corporate tax is the same 25%, but for small businesses in China it is five times lower.
| Tax in 2026 | China | Russia | Hong Kong |
|---|---|---|---|
| Income tax | 3-45% | 13-22% | 2-17%, but no more than 15-16% of income |
| Top rate starts at | CNY 960,000 a year, ~$150,000 | RUB 50 million a year | 16% on income above HK$5 million |
| VAT | 13% | 22% | none |
| Corporate tax | 25%, small business 5% | 25% | 8.25% / 16.5% |
| Dividends to individuals | 20% | 13-15% | 0% |
| Employee contributions | about 10.5% | 0% | 5%, capped at HK$1,500 a month |
| Inheritance tax | none | none | none |
Who China's taxes suit
Employees of Chinese companies on a middle salary with children: deductions for education, rent and parents cut the tax noticeably. Expats whose employer pays housing and school fees as reimbursements: until the end of 2027 those amounts are tax free. And small businesses run through a WFOE: 5% corporate tax and 1% VAT add up to a burden comparable with a simplified regime.
Who they do not suit
Senior managers and entrepreneurs earning more than CNY 960,000 a year: every extra yuan is taxed at 45%, while in neighbouring Hong Kong salaries tax does not exceed 15-16% and in Singapore the top rate is lower. Foreign owners of Chinese companies who lived on tax-free dividends: from 1 September 2026 that is 20%. Investors with a large portfolio abroad who plan to live in China for more than six years in a row. And remote workers without a work permit: China offers them no legal tax status.
Where to start
First decide where tax residency will be and through which structure income will flow, and only then register a company and open accounts. Murblz specialists check Chinese partners (counterparty check in China), help with personal accounts in China and company formation in different countries, and work together with locally licensed partners at the stages that require a licence. A specific case can be reviewed through Murblz legal support.
FAQ
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What is the corporate tax rate in China?
Can a foreigner register as a sole trader in China?
Does China tax income from Russia and other countries?
Do Russia and China have a double tax treaty?
How do tourists get a VAT refund in China?
Services
Murblz services in China
The tax rate is only half the picture. The other half is where the company sits, where the money is held and who files the accounts. Murblz specialists help with that in the same country. The quote is fixed in writing before work starts.
See also
Related programs and destinations
Similar destinations:
The same program in other countries:
Articles about China
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