IIT Internal Alignment Meeting with Taskforce and Fellow Chambers

2021-12-16 | All chapters

On 16th December, the European Chamber held an internal meeting on the review and next-step alignment on the Individual Income Tax (IIT) advocacy. The advocacy aims to request the extension of the existing non-taxable reimbursement regime for foreign national employees in China beyond 31st December 2021.

Chairs from Finance and Taxation Working Group, Investment Working Group, Human Resources Working Group and Human Resources Forum, key members, the Chamber secretariat and representatives from fellow chambers attended the meeting.

Adam Dunnett, Secretary General (SG) of the European Chamber, reviewed the European Chamber's advocacy effort and messaging over the past three years since the cancellation of the non-taxable treatment was announced in 2018. 

Magnus Sprenger, Chair of the Finance and Taxation Working Group, then examined the current situation. As per Caishui [2018] 164, the cancelation of the non-taxable treatment for foreign nationals takes effect on 1st January 2022. Into the last month of 2021, there still has no updates from the central government. It's time to move to the plan B, namely, focusing on local initiatives. 

Lexie Li, coordinator of the Finance and Taxation Working Group, then introduced possible IIT scenarios for companies assuming the cancelation was to take effect 2022. The scenarios are closely linked to the contractual types. 

SG Dunnett then led the discussion on the next-step actions. It was widely agreed that if no further announcement was to be made by 31st December 2021, then chapters and chambers should turn to local initiatives.