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foreign workers in china may pay more subject to new law!

foreigners who live and work in mainland china for prolonged periods will be required to pay tax on worldwide income under a new law that took effect on tuesday. but while the new regulations might at first seem punishing, beijing has left plenty of room for non-natives to avoid the extra payments.

foreign workers in china may pay more subject to new law!

© image | google


difference between a resident 

and non-resident taxpayer


approved at the end of august, the new legislation defines a “resident taxpayer” as anyone who is either domiciled in mainland china, or non-domiciled but spends 183 days or more over the course of a calendar year.

previously, foreigners – a term that includes residents of hong kong, taiwan and macau – had to spend more than 12 months in the country before being classed as a resident for tax purposes.

foreign workers in china may pay more subject to new law!

© image | scmp


the difference between a resident and non-resident taxpayer is that the former is liable to pay tax on their global income, not just the money they make in china.

but it is not all bad news for foreigners working in the world’s most populous country, as with the new tax law comes an improved exemption to it.

difference between now and before

according to a notice published by the state administration of taxation last month, resident taxpayers who spend more than 30 consecutive days outside china in any given six-year period are exempt from having to declare their global earnings.

in the past, they had to leave the country for 30 days or more every five years to gain the exemption, so the revision gives them 20 per cent more time to meet the obligation.

questions raised about 

new 183-day rule

however, louis lam, a tax partner at pwc global mobility services, said that under the original law, as well as the option of the 30-day sojourn, taxpayers could avoid having to declare their worldwide income by taking shorter breaks, as long as they spent at least 90 days a year outside the country.

foreign workers in china may pay more subject to new law!

that second option appeared to have been omitted from the revised legislation, which could cause problems for workers who were unable to take extended breaks away from the mainland, he said, but added there was still the chance it would be reinstated or clarified in a subsequent notice from the tax authority.

when the new 183-day rule was announced in the summer, some observers said it went against beijing’s efforts to attract overseas talent – including hongkongers on relatively short-term contracts – to work in the mainland.

foreign workers in china may pay more subject to new law!

© image | google

others said it was also unclear how the revised legislation would be applied – including exactly when the 183-day and six-year clocks start ticking – and if it would negate agreements already in place to prevent workers being taxed twice on the same earnings.

exemption no longer 

applies to these groups

for instance, beijing and hong kong have an agreement that allows people to work on either side of the border but pay tax only to the relevant authorities at home – a term loosely defined as where their main residence and family are.

under the new rule, that exemption no longer applies to certain groups, including:

  • hong kong residents that have a permanent home and family on the mainland, 

  • unmarried hongkongers who work on the mainland and do not own a flat in their home city, 

  • hong kong retirees living on the mainland, 

  • mainlanders who work but do not live in hong kong.

as for bonus payments and equity incentives, the tax authority said last week that it would exclude these from the new tax rules for a further three years.

chinese company bans employees from using apple products!

a shenzhen-based led screen company has banned employees from using apple products for three years in a show of support for chinese tech companies. the move was sparked after huawei cfo meng wanzhou was recently arrested in canada. meng was released on bail in vancouver some time ago after spending ten days in canadian custody. 

chinese company bans employees from using apple products!

© image | google

according to an announcement released on menpad’s website earlier in december, they will fine employees 100 percent of the cost of whatever apple product they buy in the course of the next three years. 

chinese company bans employees from using apple products!

© image | sohu


according to technode, the company will also subsidise 15 percent of purchases by employees who snap up huawei and zte products instead

ms. sun, a marketing employee at the company, said that

“we introduced the new rule following the recent arrest of meng [wanzhou], and as a patriotic chinese, our boss wanted to show support for huawei, a company that china takes pride in. the new rule will be in place over the next three years.”

chinese company bans employees from using apple products! 

also stipulated in the announcement by the company was the fact that employees are not allowed to buy american cars, although they will be rewarded with double commissions if they manage to export products to the us. 

get ready? all these new rules are implemented today!

today is jan 1, the first day of 2019. we wish everyone a happy new year! at the same time, a series of new rules and policies will take affect across china since today. let’s see how your everyday life in china will be changed.

get ready? all these new rules are implemented today!

mobile sim card 

nonlocal cancellation service

the ministry of industry and information technology has requested three chinese telecommunications companies to trial mobile sim card nonlocal cancellation service by november 1, 2018. china unicom, china telecom and china mobile will officially provide this service from january 1, 2019. 

get ready? all these new rules are implemented today!

© image | google

of course it’s really convenient for the foreigners who like to travel many places around china. but you should notice that the mobile number contains too much personal information, and please handle it carefully in case of scams happened or being used by swindlers.

newly revised individual income tax law 

will be implemented

the “personal income tax law of the p.r.c”, as amended by the fifth session of the standing committee of the 13th national people’s congress, will be officially implemented on january 1, 2019. from october 1, 2018, the tax threshold has been raised to 5,000 yuan. according to the newly revised tax law, a number of special additional deductions were also formally implemented.

get ready? all these new rules are implemented today!

© image |

individual tax deduction

the deduction for individual taxes is mainly for the middle class with wages and salaries as the main source of income. the final draft of the special tax deduction method has increased the deduction limit, expanded the deduction range, made more people benefit.

new version of birth certificate

a few days ago, the national health and health committee issued a notice stating that since january 1, 2019, the birth certificate (sixth edition) would be launched official.


get ready? all these new rules are implemented today!

© image | weibo

goods imported from hong kong 

to the mainland are duty-free

according to the website of the hong kong government, the international trade negotiator and deputy minister of the ministry of commerce of china, has signed the “goods trade agreement” with the hong kong financial secretary mr paul chan. 

get ready? all these new rules are implemented today!

© image | weibo

from january 1, 2019, goods originating in hong kong will be fully duty-free when imported to chinese mainland. it means that hong kong products can be bought at a lower price starting 2019!

agreement rates with multiple countries

 are further reduced

the ministry of finance announced that starting from january 1, 2019, 

  • china will adjust the import and export tariffs on some commodities, 

  • impose a temporary import tax rate on 706 commodities, 

  • and no longer impose export tariffs on 94 commodities. 

the adjustment plan for the provisional tax rate for import and export in 2019 is mainly divided into two aspects: adjusting the import tariff rate and the export tariff rate.

get ready? all these new rules are implemented today!

© image | google

among the agreed tax rates

since january 1, 2019, the treaty rates for china and new zealand, peru, costa rica, switzerland, iceland, south korea, australia, georgia, and asia-pacific trade agreements have been further reduced.

the e-commerce law 

is officially implemented

the “e-commerce law” will be officially implemented on january 1, 2019. at that time, all purchasing and micro-businesses will need to apply for the business license of both the destination and the chinese, and pay the corresponding tax.

get ready? all these new rules are implemented today!

© image | google

the “daigou”(代购) who acts as a purchasing agent and sells goods in wechat moments, will be monitored by the government strictly and subjected to highest 2 million fine once they violate the rules.

six national standards of the “electronic license” were officially implemented

the state administration of markets, the national standardization administration, and the office of the inter-ministerial joint meeting of the national electronic document management (national cryptography administration) jointly issued six national standards for the “electronic license”, which will be officially implemented on january 1, 2019.

get ready? all these new rules are implemented today!

© image | 中新网

the standard specifies the overall technical framework for the application of electronic licenses, a uniform license classification rule and basic information for licenses. each e-license is given an “identity number” and its uniqueness is ensured, making the sharing of government information resources and services more standardized, more convenient and more efficient.

why china’s exit ban is worrying for foreigners?

with the recent detention of canadian citizens by the chinese government, china, led by its ministry of foreign affairs, is trying to show to the world what happens when you do not abide by its summons.

why china's exit ban is worrying for foreigners?

© image | google


this appears to be retaliation for the arrest of huawei chief financial officer, meng wanzhou, in vancouver, which provoked fury in china.

the situation should be cause for concern – especially for those who travel frequently to china on business.

canada and the united states have travel advisories in place that make note of china’s exit ban. chinese authorities can place an exit ban on a person to prevent them from leaving the country.

it can relate to investigations into an individual, their family or an employer, and in criminal and civil matters, including business disputes.

why china's exit ban is worrying for foreigners?

© image | google


china’s exit and entry administration law (eea law) adopted in 2012 regulates the entry and exit of non-chinese nationals in and out of china. article 28 states that 

why china's exit ban is worrying for foreigners?
why china's exit ban is worrying for foreigners?

“under any of the following circumstances, foreigners shall not be allowed to exit china:

are involved in unsettled civil cases and are not allowed to exit china upon decision of the people’s courts;

are in arrears of paying off labour remuneration and therefore are not allowed to exit by decision of the relevant departments under the state council or of the people’s governments of provinces, autonomous regions or municipalities directly under the central government; …”

why china's exit ban is worrying for foreigners?


most countries restrict the exit of individuals convicted of a crime and serving their punishment in prison or by other means – very few impose an exit ban on individuals involved in a civil case. 

imagine that you are travelling in the united states and you are involved in a car crash involving multiple vehicles. you are not responsible, but the passengers in front of you sue you for damages. 

neither the eea law nor the chinese supreme court of justice defines the scope of the exit ban on its application to civil cases. we should exercise caution and assume that it applies to any types of case, especially those exposed on social media that attract more attention.

as an employee, shareholder or owner of a company, you may think that there’s no need to worry as the company has its own legal status and unless the corporate veil is lifted by a judge, you should be safe.

why china's exit ban is worrying for foreigners?

© image | google


regrettably, numerous cases have been reported in china whereby north americans were forbidden to leave china because a competitor brought a lawsuit on unfounded grounds against the company they own or are a shareholder of in order to obtain a business concession or trade secret. 

this type of unfair practice is common and unfortunately, there is no way around it except by taking precautions and discussing the issues with your legal counsel. companies should negotiate litigious matters outside china.

in the event your company has debts of any amount in china or it fails to fully pay or compensate its past or present employees, chinese courts will lift the corporate veil in order to prevent the legal representative, directors and senior management from leaving china until the matter has been redressed. 

be aware the chinese courts, creditors or employees will only accept renminbi (rmb), a non-tradable currency, adding another layer of complexity to the issue since the burden of swapping currency into rmb will fall on the defendant.

as per the travel warning of the governments of canada: 


“you may not be aware that authorities have placed an exit ban on you until you try to leave the country. it is difficult to obtain information on bans from chinese authorities. if you are unable to leave the country because of an exit ban, consult a lawyer and contact the closest office of the government of canada.”

no one should stop travelling, trading with or investing in china and there has been tremendous progress in the country in the past 40 years, but travellers – especially business travellers – should take note of the exit ban law that is currently in place.