European Chamber Stance on IIT Update Go back »

2022-01-02 | All chapters

European Chamber Stance on IIT Update

The European Chamber welcomes both the State Council’s announcement on 29th December, that bonuses will continue to be taxed separately at a preferential rate until the end of 2023, and the two-year extension of non-taxable allowances jointly announced by the Ministry of Finance and the State Administration of Taxation on 31st December.

The European Chamber has advocated tirelessly for the past three years for the extension of non-taxable allowances for expatriate employees, which include those for housing, education and language training. These items had been set to become fully taxable in 2022, which would have increased the financial burden of companies and/or individuals, resulting in a further decrease of international assignments to China.

“The extension of non-taxable allowances is highly significant not only for a great number of foreign companies operating in China that employ experienced expatriate staff, but also for China itself,” said Joerg Wuttke, president of the European Chamber. “We believe this solution provided by the Chinese authorities will stem the flow of foreign talent from China, which will help to maintain a high level of competition and innovation within the Chinese market, while also improving international relations in general.”

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Shihui Tang