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Personal Income Tax Payments Affect Work Permit

From April 1, 2017, the work permit system for foreigners has been launched nationwide. Foreigners' work permit in China shall be changed to a unified bid for the work permit of foreigners by applying for a foreign expert certificate and a foreign employment permit.

The requirements for new foreigners’ work permits in China are very different from old policy. The main point is that regardless of the position of the foreigner appointed to work in a company, the employee should sign a corresponding labor contract with the company and clearly stated the employee's salary, position, job content and other basic conditions in the labor contract.

It is said that the Guangzhou Foreign Experts Bureau also issued corresponding regulations on foreigners' work permit requirements:

A small and medium-sized trading company established more than six months old must pay taxes before it can apply for a foreigner's work permit.

Foreigner's application for work permit extension must provide:

Valid business or personal tax payment certificate
Description of employment status of employees
This means that taxation has become an important part of foreigners' work permit review!


Therefore, for the enterprise: tax payment should be reasonably arranged.


If your company intends to apply for a work permit for foreigners, we suggest that you:


1. If there is sufficient time, please arrange tax payment in advance in the next quarter;

 
2. If the time is urgent, please arrange to pay the tax immediately.


For employees: Any foreigner shall pay the corresponding personal income tax in accordance with China's personal income tax payment rules. The specific requirements are as follows:

Foreign personal income tax calculation method

Personal income tax = (monthly salary - 4800) * tax rate - quick deduction

Although the immediate payment of taxes and fees can be used in conjunction with the relevant review by the Bureau of Experts, this does not mean that companies can only be allowed to cross the border during the work permit period. If the company has zero tax or long-term losses, the Bureau of Experts will think that the company does not have the needs and qualifications for recruiting foreign talent. At the same time, temporarily paying a large amount of taxes, the tax bureau may also list the company as a key check target! Therefore, both companies and individuals should perform their duties in accordance with the laws and regulations of China in accordance with the law.