https://www.proz.com/forum/money_matters/336382-income_tax_in_china_for_foreign_freelancers.html

Income Tax in China for foreign Freelancers
Thread poster: Frederik Klingenschmid

Frederik Klingenschmid  Identity Verified
Mexico
English to German
+ ...
Jul 31

Hi guys,

I have a potential client, based in China,
and the NDA says:
"According to the relevant laws and regulations of the People’s Republic of China, Company will deduct individual
income tax from the payment of Recipient and pass it onto the government."
Any experience with something like that?
Thank you for your input!


 

LIZ LI
China
Local time: 22:37
Member (2008)
French to Chinese
+ ...
Excempted for those who stay in mainland China for less than 183 calendar days within a fiscal year Jul 31

As long as you don't live in Mainland China, it's not your concern.

You may find useful ino from the State Taxation Admin:
http://www.chinatax.gov.cn/eng/n2367731/index.html

In case that you DO live in Mainland China for 183+ days:it's 60k tax-free deductable upon declaration next year. So in a yearly-basis, any amount within 60k withdrawn by the State
... See more
As long as you don't live in Mainland China, it's not your concern.

You may find useful ino from the State Taxation Admin:
http://www.chinatax.gov.cn/eng/n2367731/index.html

In case that you DO live in Mainland China for 183+ days:it's 60k tax-free deductable upon declaration next year. So in a yearly-basis, any amount within 60k withdrawn by the State will be refundable. You may find out the details for 60K+ in the same site, from 3% to 45%.
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Frederik Klingenschmid  Identity Verified
Mexico
English to German
+ ...
TOPIC STARTER
No concern for Freelancers out of China Jul 31

Alright, so you're saying, as long as I always work from out of China, there should not be any issue and they can't shorten my payments?

 

LIZ LI
China
Local time: 22:37
Member (2008)
French to Chinese
+ ...
Do clearify with the agency Jul 31

You'd better send the agency the link above and ask them to clearify.
Don't forget to ask about if there's any wire transaction fee to Apply.
There are sooooooooo many agencies, big or small, trying everthing they can ever think of to pay you less.

AND if you can read Chinese, you may also check the agency here:
http://www.gsxt.gov.cn/index.html

You can find
... See more
You'd better send the agency the link above and ask them to clearify.
Don't forget to ask about if there's any wire transaction fee to Apply.
There are sooooooooo many agencies, big or small, trying everthing they can ever think of to pay you less.

AND if you can read Chinese, you may also check the agency here:
http://www.gsxt.gov.cn/index.html

You can find out if they are blacklisted or not.
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Frederik Klingenschmid
 

Sheila Wilson  Identity Verified
Spain
Local time: 15:37
Member (2007)
English
+ ...
Change the wording Jul 31

Frederik Klingenschmid wrote:
the NDA says:

Not the NDA, surely? This should be in the service agreement. But no matter. .

the NDA says:
"According to the relevant laws and regulations of the People’s Republic of China, Company will deduct individual
income tax from the payment of Recipient and pass it onto the government."

You absolutely must at least get that wording changed, if mot deleted. It's too easy as it is for them to deduct the money first and argue about it later, while you try to get a refund from the Chinese tax authorities. If you have absolutely no intention of ever living in China, strike out the clause and sign there as well as at the end.

If your authorities are happy to provide one, send a certificate of fiscal residency or some sort of certificate declaring that you pay taxes or social contributions or are registered as self-employed in Mexico. Failing any of those, write a declaration youself "in good faith" stating where you pay your taxes and your intention to stay put there.

Have you checked out this agency on the Blue Board? Do they have a good reputation? Do makecsure before you sign anything.

[Edited at 2019-07-31 08:10 GMT]


Frederik Klingenschmid
 

LIZ LI
China
Local time: 22:37
Member (2008)
French to Chinese
+ ...
Common practice in CN Jul 31

Sheila Wilson wrote:
It's too easy as it is for them to deduct the money first and argue about it later, while you try to get a refund from the Chinese tax authorities. If you have absolutely no intention of ever living in China, strike out the clause and sign there as well as at the end.


Just to clarify that it's not the agency, but the tax bureau who is empowered to make the withdrawal per payment above 800 rmb from the individual who provides his or her service to the agency.
You are able then, with your passport number or ID or work permit number, to check with the authority whether such amount has been properly declared or not.

As for fiscal certificate, I don't think your Chinese client need it for a newly recruitment. As It's limited to a short listed countries with bilateral agreement with CN government. And you only need to provide it if the agency requests it due to authority control, thus the payment surpasses a certain amount.

Lots of big firms in mainland China never appear in the Blue Board. I DO hope that it will change in the near future.


Frederik Klingenschmid
 

Sheila Wilson  Identity Verified
Spain
Local time: 15:37
Member (2007)
English
+ ...
But not for every freelance service supplier Jul 31

LIZ LI wrote:
Just to clarify that it's not the agency, but the tax bureau who is empowered to make the withdrawal per payment above 800 rmb from the individual who provides his or her service to the agency.
You are able then, with your passport number or ID or work permit number, to check with the authority whether such amount has been properly declared or not.

As for fiscal certificate, I don't think your Chinese client need it for a newly recruitment. As It's limited to a short listed countries with bilateral agreement with CN government. And you only need to provide it if the agency requests it due to authority control, thus the payment surpasses a certain amount

It's the same elsewhere, but tax should only be taken from suppliers who are fiscal residents of China - not from suppliers who never/rarely set foot in the country and pay their taxes elsewhere.


Frederik Klingenschmid
 

LIZ LI
China
Local time: 22:37
Member (2008)
French to Chinese
+ ...
Agreed Jul 31

Sheila Wilson wrote:
It's the same elsewhere, but tax should only be taken from suppliers who are fiscal residents of China - not from suppliers who never/rarely set foot in the country and pay their taxes elsewhere.

That's why I told Frederick from the very beginning it's out of his concern in this case.

But taxation imposed to business entities and individuals are totally two different concepts. Don't get confused on it.

[Edited at 2019-07-31 13:17 GMT]


Frederik Klingenschmid
 


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