China

An individual is a China tax resident if domiciled in China, or if not domiciled but present in China for 183 days or more in a tax year. Domicile generally follows legal residency status or family and economic ties, and Chinese nationals other than residents of Hong Kong, Macau, and Taiwan are generally treated as domiciled. Non-domiciled individuals present for fewer than 183 days in a tax year are non-residents.

China's tax year is the calendar year, though filing is generally administered monthly; employers withhold and file provisional or final income tax on employment income each month. Residents required to reconcile their comprehensive income must file an annual reconciliation return between 1 March and 30 June of the following year. There is no joint filing; spouses are assessed and taxed separately.

Non-residents are taxed on their China-source income only. Employment income, remuneration for labour services, author's remuneration, and royalties are each taxed separately on a monthly or transaction basis under the same 3%-to-45% progressive rate structure used for residents' comprehensive income, rather than pooled together annually.

Resident individuals calculating comprehensive income may claim a standard basic deduction, deductions for statutory social security and Housing Fund contributions, and a set of specific additional deductions covering child education, continuing education, mortgage interest, rental expense, elderly care, major medical expenses, and childcare for children under three. Non-residents' employment income deductions are limited to the standard basic deduction, and charitable contributions to qualified domestic non-profits are separately deductible up to a share of taxable income across all income categories.

Foreign individuals (including residents of Hong Kong, Macau, and Taiwan) who are China tax residents for 183 days or more a year, but for no more than six consecutive years, are taxed on foreign-source income only to the extent it is paid or borne by a China entity or individual; worldwide taxation applies only from the seventh consecutive qualifying year, and the six-year count resets if the individual spends more than 30 consecutive days outside China in a year. Foreign individuals present in China for no more than 90 days in a calendar year (183 days under an applicable tax treaty) are exempt from IIT on China-source income paid by an overseas employer and not borne by that employer's China establishment.

China exempts small-scale VAT taxpayers entirely where monthly sales are RMB 100,000 (RMB 300,000 per quarter); previously implemented as a VAT exemption, this threshold became a statutory threshold provision for the period 1 January 2026 through 31 December 2027 under the VAT Law's preferential-policy transition rules.

China applies a zero VAT rate to exported goods, exported repair/processing services, international transportation, and certain services completely consumed outside China (including R&D, design, and software services); exporters are generally entitled to credit or refund the related input VAT, though a prescribed formula limits full refunds for many exported goods.