1. Length of residency required for tax exemption

Non-China-domiciled individuals who live in China for less than 90 days cumulatively during a tax year are exempt from IIT on China-sourced incomes which are paid by overseas employers and not borne by agencies or venues in China of said employers.

Non-China-domiciled individuals who live in China for at least 183 days in China in a calendar year for a consecutive period of six years may be exempt from IIT on foreign-sourced incomes paid by overseas organizations or individuals by complying with the registration and filing procedures stipulated by the tax authority. If there is a single departure outside of Chinese territory of more than 30 days during any year of the six-year period, the clock to count the length of residency for tax exemption purpose will be reset.

The tax year refers to the period from January 1 to December 31 of each calendar year.

2. The following incomes are tentatively exempt from IIT:

(1) Incomes of diplomatic representatives of foreign embassies and consulates, consular officers and other related staffs in China who are eligible for tax exemption in accordance with relevant regulations of China;

(2) Incomes from wages and salaries of the following foreign experts:

1) Foreign experts sent directly by the World Bank to China under the special loan agreement of the World Bank;

2) Experts sent directly by UN organizations to China;

3) Experts working in China for UN assistance projects;

4) Experts sent by donor countries to work on non-reimbursable assistance projects in China;

5) Cultural and educational experts working in China for less than two years under cultural exchange programs signed by a foreign government and Chinese government, provided that their wages and salaries are paid by the foreign government.

6) Cultural and educational experts working in China for less than two years under the international exchange programs of Chinese universities and colleges, provided that their wages and salaries are paid by the foreign government.

7) Experts working in China under non-governmental scientific research agreements, provided that wages and salaries are paid by the governmental agency of the foreign country involved.

(3) Foreigners’ housing allowance, meal allowance, relocation expenses and laundry fees in non-cash forms or in the form of cash reimbursement; and business travel allowance, home visit allowance, language training expenses and children’s tuition fees at reasonable levels;

(4) Dividend and bonuses obtained by foreign nationals from Sino-foreign joint ventures;

(5) Incomes exempt from tax under international conventions and protocols signed by the Chinese government.