In the past few months, we have seen tax bureaus in major cities across China taking stricter efforts to tighten the tax compliance requirements and tax collection on China Individual Income Tax (IIT). These efforts include implementation of new measures over the administration of non-taxable fringe benefits and new tactics against those who failed to report their offshore payroll. The new measures and tactics target foreign employees working in China and have been successful in recovering some tax revenue loss – it is likely that they will be adopted widely in other cities across China in the near future.
In this issue of News Flash, we will share with you our observations on these new measures and tactics as well as recommendations for companies and foreign employees on how to manage their tax exposures, such as ensuring they have the proper contractual and supporting documentation and complying with additional registration requirements.
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