Background:
There are significant
changes in China IIT in 2019 which significantly affect HR of companies and
foreigners working in China. Tax bureaus
and State Administration of Taxation have organized a lot of training programs,
videos and mobile APP to ensure the IIT reform can smoothly move forward.
Facing the big changes
but the rules were only issued in December 2018, what are the risks and
possible planning ideas which companies can consider? In the big data environment, which commonly
used methods in the past can’t be used now? Who will be penalized for poor tax
planning?
The focus of this
seminar is risk and planning and the tax filing and using of APP will not be
covered.
Case study will be
used to explain the rules and regulations.
The seminar value
The latest trends in IIT enforcement on
expatriates working in China
12 vivid practical cases analysis to provide
best solutions for IIT Planning
Open discussion mode and inspiring
interaction
Who should attend?
Senior Management;
Expatriates and Second Staff; HRD and HRM; Tax Director and Manager
Course Outline:
Case 1
Mr Smith from Germany
has worked in Shanghai since 2003. His
wife and children come together with him.
He acquired an apartment in Shanghai.
He has not concerned about the China worldwide tax on foreign income and
tax break before.
He is the senior
executive of the Chinese headquarters of a US listed group. He has shares of the US listed company and
property in Germany for his parents.
Analysis and
discussion
According to IIT law, will he be considered
as having domicile in China and hence, subject to worldwide China tax on his
foreign income?
How to prove that he does not have a China
domicile?
He has never arranged for any tax break
before. Can he arrange for tax break in
2019 to avoid his foreign income being taxable?
He considers selling his Shanghai
apartment. How can he remit the money
legally to overseas?
Case 2
Mr Lin is a US citizen
working in China and he got the China Green Card and with his family in
Shenzhen. The group was listed in Hong
Kong and he has stock option and also shares of the group.
Analysis and
discussion
US citizen has to pay
US tax on worldwide income. A China tax
resident with domicile has to pay China tax on worldwide income. Mr Lin has received income from the HK listed
company. Which country shall he pay his
tax?
How should stock
option be taxed under the new IIT law in 2019?
Case 3
Ms Huang with Chinese
identity card obtained the Hong Kong Identity Card (non-permanent) seven years
ago. She works and lives in
Beijing. She has bank accounts,
insurance policies, securities account, property in HK and also used BVI
company to hold shares of subsidiaries of overseas and China. She heard that an overseas trust can help
avoiding China tax and she considered executing.
Analysis and
discussion
Is it still workable to using BVI company as
fire wall under the 2019 IIT law?
BVI company has not distributed any dividend
to her and the plan is to wait until she is no longer a China tax
resident. Can this method still
workable?
She has received an email from the bank in
HK asking about her tax residence. How
should she reply?
What is the information on her foreign
assets and income be transferred to China State Administration of Taxation via
the CRS / Automatic Exchange of Financial Account Information?
Even though the China tax bureau does not
know, shall Ms Huang report her foreign income to the tax bureau? What are the penalty on non-reporting?
She is considering giving up her Chinese
citizenship. What are the tax procedures
from 2019 onward?
If she does not give up her Chinese
citizenship, how can she become a non-China tax resident?
She is considering transferring her foreign
assets to a trust. Will this trigger any
China tax?
Can her avoid CRS information exchange under
the trust?
Case 4
Mr Tan, a Singaporean,
who is the CEO of the regional headquarters.
He stays in China for around 20 days in a month and the other days in
Hong Kong and Singapore. The Group pays
him RMB20,000 in China and USD10,000 in overseas. Beijing company withhold IIT based on the
RMB20,000.
Analysis and
discussion
Is the USD10,000 received in overseas
taxable in China?
If it is taxable, how to calculate?
If it is taxable and Beijing company only withhold
IIT based on RMB20,000, will it be penalized?
Under the 2019 IIT law, Mr Tan has to file
the annual IIT returns. If he did not
declare the foreign salary, will he be penalized?
Case 5
The legal
representative of Shanghai, Mr Hans comes to China for around 50 days in a
year. The Group CFO, Ms Wong does not
have any positions in China comes to work for about 100 days and another 100
days as volunteers and for leisure. Both
of them did not get any salaries in China.
Analysis and
discussion
Is Mr Hans subject to China IIT?
Will Ms Wong become a China tax resident
under the 2019 IIT law? How shall she report her IIT?
Is Shanghai company liable to withhold IIT
for Ms Wong? Will there be any penalty
for not withholding IIT?
Case 6
Company give cash
coupons and mooncake coupons to staff and did not withhold IIT on such amounts.
Analysis and
discussion
During tax audit, it was discovered by the
tax bureau that taxable incomes were not reported. How will the company be penalized?
The employees have not considered such
amounts as taxable income, will they be penalized too?
Case 7
Company will pay
annual bonus to employees in 2019 for the performance assessment of 2018. According to the transitional period
treatment, either the original method or the new comprehensive income method
can be used.
Analysis and
discussion
Who should use the old method? Who should
use the new comprehensive income method?
Case 8
The company paid for
commercial insurance, liability insurance and travel insurance for staff on
business trips. The Group also paid
overseas mandatory social security contribution for expatriates working in
China.
Analysis and
discussion
Which types of insurances are subject to
IIT? Which types are not taxable?
How to book the insurances in the accounts
so that the amount can be deductible for enterprise income tax?
Are the mandatory social security
contributions in foreign countries taxable in China? Can the employee’s
contribution be tax exempt?
Case 9
Mr Zhu has Chinese
identity card. The Group paid him
salaries in China and director’s fee in Hong Kong.
Analysis and
discussion
According to HK tax ordinance, Mr Zhu has to
pay HK tax on his director’s fee from HK company. If so, is this not taxable in China?
If the director’s fee is also taxable, how
to calculate and pay China IIT?
Does the Chinese employer has withholding
obligation on the overseas director’s fee?
Case 10
A foreign lawyer of a
multinational law firm in Beijing who received overseas profit was required to
pay back IIT of RMB8 million.
Analysis and
discussion
Why the overseas dividend becomes taxable in
China?
Case 11
Singapore headquarters
has seconded a number of senior executives to work in China. Salaries are partly paid directly by the
Chinese subsidiaries and partly paid by the Singapore headquarters on behalf of
Chinese subsidiaries. China IIT has been
paid based on full salaries. The
Singapore headquarters plans to charge back the salaries from the Chinese
subsidiaries.
Analysis and discussion
What is meant by “salaries paid on
behalf”? Why the amount cannot be
remitted to overseas even though IIT has been fully paid?
Why only with secondment letter can create
problems?
What are the documents to be provided in
order to remit the money out from China?
Why the amount cannot be remitted if that is
over 12 months? Is there any special
case which can by-pass such restriction?
Case 12
Mr Zhang is an IT
expert. Individual service income can be
taxed at a lower rate under the comprehensive income from 2019 onward.
Analysis and
discussion
What are the differences between employment
and individual service?
How should he select?
Other issues
The common questions on six specific
additional deductions
The issues to be noted on provisional
withholding
The treatments and options for transitional
period
About the Speaker
Miss Bolivia Cheung, Founder and Director, BC Training Co
Ltd (FCCA and FCPA)
Bolivia has over 20
years of experience on China tax and business advisory. She joined KPMG in 1996, promoted to
partnership in 8 years and retired from a tax partner in 2011 after working in
KPMG for 15 years. She frees up herself for training, education, free-lance
consultancy projects and charitable activities, and completed the MA in
Practical Philosophy, her second master degree.
Bolivia has stationed in Guangzhou and Shanghai for over 8 years which
means a lot of practical experiences in dealing with problems and issues of
taxpayers.
Best Wishes,
Abbie Jiang | 江小姐
China Compliance Professional | CCP 法商精英会
CCP法商精英会是慧岩咨询旗下专注于合规风控公开课、内训与微咨询的平台。致力于成为法律与商业之桥梁，让法律合规为企业的商业营运与发展创造价值。
电话: 136 7192 4720/ 021-5620 3871
邮箱: jiang.abbie@wisdomrockcorp.com; 180255857@qq.com
地址：上海市虹口区虹关路368号，新港城建邦大厦302室