Countdown! These Tax Incentives Will Be Canceled by 31 Dec 2021!

Countdown! These Tax Incentives Will Be Canceled by 31 Dec 2021!

In this article, we will explain a couple of tax incentives policies, which will expire by 31 December 2021.

And here are our previous articles about tax, hope can help you as well!

What You Must Know If You Pay Tax in China!

Must Read: Salary Level Decides Your Work Visa Type!


VAT for small-scale taxpayers increases from 1% to 3%

New Changes

From 1 Jan 2022, VAT for small-scale taxpayers will increase from 1% to 3%.

The universal benefit of the levy-free concession remains.

Previous Policy

Because of the epidemic, from 1 Apr 2021 to 31 Dec 2021, VAT small-scale taxpayers subject to tax sales rates with a levy rate of 3% shall pay tax with a levy rate of 1%, and VAT small-scale taxpayers subject to a 3% prepayment rate shall pre-pay 1%.

*This policy will expire by 31 Dec 2021

Source: State Taxation Administration of the People's Republic of China


Foreigners are no longer eligible for any tax exemption on housing allowances, language training fees and child education allowances

New Changes

From 1 Jan 2022, foreign individuals will no longer be entitled to the preferential tax exemption for housing allowance, language training fee and children's education fee allowance. They are still entitled to special additional deductions in accordance with the regulations.

Previous Policy

Foreign residents in China, from 1 Jan 2019 to 31 Dec 2021, can enjoy special additional deductions for personal income tax purposes or enjoy one tax exemption for allowances like housing allowances, language training fees, or children's education fees in accordance with the regulations (they can not choose all). 

Once an individual has chosen their exemption, they cannot change it within 1 tax year. 

You can scan this QR code for the official policy from the Ministry of Finance of the People's Republic of China.


Source: Ministry of Finance of the People's Republic of China 


How your type of residence permit affect your tax payment?

Type A residence permit for work

If you hold a type A residence permit,  your annual salary income (before tax) should exceed RMB600,000 and have paid an annual individual income tax of over RMB120,000(take policy in Shanghai as an example).

Here's a sample from our clients

PR application for working staff

If you want to apply for a permanent residence card for working staff, you should provide certification of annual individual income tax exceeding RMB120,000 for 4 consecutive years(take policy in Shanghai as an example).

Here's a sample from our clients

Type B work residence permits for foreign investors

If you invest and own a company, when extending your type B work permit, you need to provide a quarterly billing of 90,000 RMB at least.

Proof of the company's normal operations generally includes:

  • Fapiaos for business transactions

  • Company bank account

  • Proof of hiring Chinese employees

A commitment sample that states they will provide social insurance forms of Chinese employees and tax payments to prove the company's operations.

WorkVisaService is one of AnyHelper's platforms. Dedicated to china visa solutions, WorkVisaService delivers the most professional help. We hope you find our articles useful. And if you need any help in living in China, you can always turn to AnyHelper official account for real-time answers.*





If you have any questions about China visa applications(work visa, PU letter, company registration and more), please contact our visa consultant Anna (WeChat ID: AnyHelper_Anna).

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Follow our Official WeChat to get the latest policy of China Visa.

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