China

In general, individuals who have domicile in China, or though without domicile but have resided for more than 183 days in total in China are deemed to be residents in China. An individual who has no domicile and does not reside in China, or has no domicile and resided in China for less than 183 days in a tax year is a non-resident individual. Tax year is the calendar year from January 1 to December 31. Domicile refers to habitual residence in China on account of domiciliary registration, family ties, economic interests. Habitual residence is a legal criterion whereby a taxpayer is defined and it does not refer to actual residence or residence of an individual for a particular period of time. For example, China is the habitual residence for an individual who should come back to reside in China after staying, working, visiting families, touring in a place other than China.

Relevant tax provisions:

• Article 1: Individual Income Tax Law of the People's Republic of China
  http://www.npc.gov.cn/npc/xinwen/2018-09/05/content_2060671.htm
• Article 2: Regulations for the Implementation of the Individual Income Tax Law of the People’s Republic of China
  http://www.gov.cn/zhengce/content/2018-12/22/content_5351177.htm

The information is to be considered as preliminary guidance only. Should there be any inconsistency between Chinese and English version, the Chinese version shall prevail.

As a general rule, an entity is deemed to be a tax resident in China where it is incorporated in China in accordance with the laws of China or it is incorporated elsewhere but has the place of effective management in China. Above mentioned entity include enterprises, social organisations and other income generating organisations. Place of effective management refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an entity.

Relevant tax provisions:

• Article 2: Enterprise Income Tax Law of the People’s Republic of China
  http://www.npc.gov.cn/npc/xinwen/2019-01/07/content_2070260.htm
• Article 3 and 4: Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China
  http://www.chinatax.gov.cn/n810341/n810765/n812176/n812748/c1193046/content.html

The information is to be considered as preliminary guidance only. Should there be any inconsistency between Chinese and English version, the Chinese version shall prevail.

The law of China does not treat sole proprietorship or partnership as a taxable person. Instead, taxable persons are the proprietors and partners rather than the proprietorship and partnership itself.

For the purposes of reporting under the terms of the Common Reporting Standard a reportable entity also includes entities that are typically tax transparent, e.g. partnerships.

Relevant tax provisions:

• Article 1: Enterprise Income Tax Law of the People’s Republic of China
  http://www.npc.gov.cn/npc/xinwen/2019-01/07/content_2070260.htm
• Article 3: Guidance on Individual Income Tax Administration of Sole proprietorship and Partnership (Caishui [2000]91)
  http://www.mof.gov.cn/zhengwuxinxi/caizhengwengao/caizhengbuwengao2000/caizhengbuwengao20007/200805/t20080519_21469.html

The information is to be considered as preliminary guidance only. Should there be any inconsistency between Chinese and English version, the Chinese version shall prevail.

Global Cooperation and Compliance Division
International Taxation Department
State Administration of Taxation

No. 5, Yangfangdian Xi Lu
Haidian District
Beijing
P.R.China

E-Mail: eoicompetentauthority@chinatax.gov.cn