China extends preferential tax policies for foreigners to 2028

CHINA will extend preferential income tax policies for foreigners working in the country through the end of 2027, in a move that sends an encouraging signal to foreign businesses in China.

The Asian nation will continue to waive taxes on foreign workers’ benefits, including subsidies for housing, language training and children’s education, said its finance ministry on Monday (Aug 28).

Earlier this month, the European Union Chamber of Commerce in China called on the Chinese authorities for an “urgent clarification” as to whether non-taxable allowances for foreign employees would apply beyond the end of this year, saying an extension of the policy would demonstrate a firm commitment to the foreign business community as well as Chinese firms that hire foreign nationals. 

On Monday, the chamber welcomed the four-year extension of the individual income tax regime, or IIT, for foreign nationals, describing it as “very positive news”.

“Having continually advocated this issue at all levels of government, the European Chamber believes it can help to stem the outflow of foreign talent that has taken place over the last few years,” the group said in a statement.

“Announced on the margins of the start of the new school year, it will be extremely welcome news for families that have made the decision either to come to or remain in China.” BLOOMBERG