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1. IIT ISSUES FOR AN EXPATRIATE WORKING IN PRC
1.1 THE CONCEPT OF "HABITUAL RESIDENCE" IN PRC
While a foreign national (an expatriate) has his own family or based on the career factors, has to habitually or frequently reside in PRC, or be recorded as the tenant in any residential record, he is regarded as having the place of residence inside PRC.
In other words, when a permanent citizen of PRC is considered to be one who has a place of residence inside PRC, he has to bear the IIT liability subject to the income earned from the global scale.
For a permanent citizen of PRC, who bears the overseas passport or becomes the citizen of an overseas country, in considering his own individual income tax liability, he has been considered the same as an overseas expatriate.
DEFINITION OF THE FULL-YEAR RESIDENCE IN PRC
Within a calendar year, an expatriate residing in PRC greater than one year, is regarded as residing there for one whole year in PRC unless:
- The once-off departure from PRC has the duration longer than consecutive 30 days; or
- The accumulated departure days amounting to 90 or more days.
For one who has not habitually resided in PRC, but resided longer than 1 year, his income should be subject to IIT of PRC.
FOR EXPATRIATES RESIDING IN PRC LONGER THAN 5-YEAR
If an expatriate has resided in PRC longer than 5 years or above, his IIT liability is calculated based on his global income the same as a permanent citizen of PRC. As the expatriate resides in PRC persistently longer than 5 years, stepping into the 6th year, his annual GLOBAL income is taken into PRC's IIT consideration.
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