Post Event: Seminar “Cancellation of Non-taxable Allowances for Foreign Employees”

Dear Members and Friends of CICC,

The China-Italy Chamber of Commerce (CICC) is glad to inform you that, on March 31st, 2021, CICC organised a seminar themed “Cancellation of Non-taxable Allowances for Foreign Employees” that focused on key trends on Individual Income Tax (IIT) concurrently at Shanghai Deloitte Tax Ltd. Suzhou Branch and CICC Shanghai Office.

Helen Ha, Tax Partner with Global Employer Services Team in Deloitte Eastern China spoke from four prospects: Updates on Talent Incentives in China, Latest Trends and Market Insights on Benefits-in-kind (BIK)Tax Legislative Change, China Immigration Updates, and Global Mobility Insights on COVID-19. She also shared her views on whether foreign individual's non-taxable BIK policy on accommodation, children's tuition and language training in China will be terminated till the end of 2021.

Helen elaborated the PRC IIT Subsidy Policy in Greater Bay Area (GBA), Preferential IIT policy for the Hainan Free Trade Port (Hainan FTP), as well as other cities such as Lingang, Shanghai, and Suzhou.

As for the latest trends and market insights on BIK tax legislative change, Helen shared the impacts on employers and employees caused by the cancellation of non-taxable BIK for foreigners and gave detailed steps on how to deal with the changes. Helen quickly went through the changes in immigrant rules since March 20th, 2020 and shared the forecast for 2021 and beyond, and on global mobility insights on COVID-19 that are key themes we are hearing in the market such as compliance & regulatory, mobility & headcount optimization, and employee well-being & experience.

Lorenzo Riccardi, Managing Partner RsA Asia Tax Advisor, shared from four aspects at CICC Shanghai Office: 2022 tax impact on benefits, bonus, stock options; South China personal tax policy in particular, Hainan, and Hong Kong; worldwide taxation and China-Italy New Tax Treaty; and tax comparison Italy, China, South East Asia (SEA).

Lorenzo reviewed the definition of tax residence, six-year break rule, IIT liability based on the tax residence and length of stay in China, income subject to PRC IIT, source of the income, tax deductible allowances for expats, bonus, as well as stock options. As for the cancellation, Lorenzo suggested that employees should monitor the potential legislative changes and evaluate the cost impacts for both employers and employees.

He specifically talked about the Double Tax Agreement (DTA) between China and Italy and the impacts under the Agreement.

The seminar ended with the Q&A session that was moderated by Riccardo Campanile, CICC Suzhou Board Member. Questions from both online and offline were raised and answered.

Kind Regards,

CICC Team