Two weeks ago, we published an article about Notice! Have You Received This Message from Bank Recently?

We have received many questions by our readers. 

“Will it affect my stay in China?”

“How to avoid paying taxes? “

“How do I pay the tax?”

#Today, we collected some common questions to answer below.

You may have received this message, an notification about bank asking the account holders to go to banks to report which countries’ taxpayers they belong to before 31 December, which is for information exchange among countries from CRS.

© Image | GOOGLE

What should you do?

 

Go to any sub-branches with your passport and fill the form. 

There are 3 options 

on the top of the form.

 

 

1

The first option, PRC Tax Resident, refers to individuals who domicile in the PRC, and travel outside of China for a single trip less than 30 days or combined trips less than 90 days during the resident of China in 2018. In addition, individuals are not asked for the tax information in other countries (normally refer to their own countries) are regarded as PRC Tax Resident.

2

The second option, PRC Non-tax Resident, refers to individuals who do not domicile in PRC, and travel outside of China for a single trip over 30 days or combined trips over 90 days during the resident of China in 2018. 

3

The third option, Tax Resident in PRC as well as other countries, refers to individuals who meet the conditions of first option and are also paying tax in other countries or these countries require to pay tax.

What is domicile?

 

If foreigners reside in China due to study, working, visiting, travelling and won’t come back to China after finishing these purposes, then they don’t domicile in China. Even they own houses in China, if they don’t work in China and come back to their own countries, they don’t domicile in China.

Please choose it based on your actual situation.

Will your visa be effected 

if you ignore this message?

 

This message states that if you don’t fill the form on time, the bank will consider you as Non-tax Resident automatically. We still suggest you that you should fill the form and submit to the bank in time, otherwise the bank may close the account or recognize your information mistakenly, which may lead to adverse credit record due to tax deferral.

 

© Image | GOOGLE

 

Visa related departments haven’t required for information about personal tax yet. There is no influence for now, but we are not sure in the future.

Tax Resident in PRC

Generally, PRC Tax Resident has to declare tax to tax bureau every year. But many taxpayers failed to do so in the past. In terms of when China tax bureaus will inspect, close personal accounts compulsively and ask for tax payment, we can’t give an exact answer or forecast how policy will work in the future.

Tax Resident in PRC 

as well as other countries

You will need to pay the tax in China and meanwhile, China will exchange your assert information to another country you filled. Whether there is double taxation by another country or not, it depends on if there is tax convention between two countries or not.

How to pay the personal tax if you need to declare all the income from your personal account?

 

First you need to state the source and expenditure of each income. After calculating the total personal income amount, using the calculation method of personal tax rate. 

© Image | GOOGLE

For Example

 

After deducting social security and other items, if your annual income is 1,000,000 yuan, the tax rate is 45% and the quick deduction is 180,000 yuan, your personal tax should be 1,000,000*45% – 180,000=270,000

Which situation is considered 

as PRC Tax Resident? 

Travelling outside of China for a single trip less than 30 days or combined trips less than 90 days during the resident, or living in China no less than 183 days?

According to present tax laws and the bank asks for declaration of 2018, it is the situation of travelling outside of China for a single trip less than 30 days or combined trips less than 90 days during the resident. 

However, new personal tax laws will be put into effect in 2019, and in this condition, PRC Tax Resident will be regarded as those who live in China no less than 183 days. Therefore, from January 1, 2019, the standard time of resident will be 183 days.

“I am not in China now.  Can I ask someone to do that for me?”

 

We are afraid not because you need to confirm the information and sign there. You can manage it in bank which you opened bank account before as well as any other sub-branches.