Laws of the People's Republic of China

the State Administration of Taxation

Circular of the State Administration of Taxation on Intensifying the Administration of Archival Materials concerning the Individual Income Tax on Foreigners

Guo Shui Han [2006] No. 58

The local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, and cities as specifically designated in the state plan

With a view to intensifying and regulating the collection and administration of individual income tax on foreigners (including people from Hong Kong, Macao and Taiwan as well as overseas Chinese, hereinafter the same), you are hereby notified of the relevant requirements for the administration of archival materials concerning the individual income tax on foreigners as follows:

I.

Establishing an Account for Foreigners by Enterprise as the Basic Unit

With regard to those enterprises that employ foreigners within jurisdiction, the tax authority at the grass-root level shall establish an administration account for foreigners by enterprise regardless of how many foreign employees there are or whether or not relevant foreigners take their jobs for a long term or only temporarily. An administration account for foreigners shall include such information of the relevant foreigners as name (Chinese and foreign language), nationality, post and tenure.

II.

Adopting the Administration Method of "One Archive for One Person" on the Basis of the Administration Account

The tax authority at the grass-root level shall, on the basis of the administration account for foreigners by enterprise, adopt the administration method of "one tax return archive for one person". An individual account shall include such information as: name (in Chinese and foreign language), gender, birth place (in Chinese and English), birth date, overseas domicile (in Chinese and English), name of the entity that has dispatches him, tenure of office in China or period of labor service, post, period of residence, time of entry into or exit out of China, resident address in China, phone number, postal code, amount of income, payment place, withholding agent, amount of tax declared, amount of tax payable, amount of tax paid and time of turning over the tax into the state treasury.

III.

Dynamic Administration

Dynamic administration shall be applied to the administration accounts for foreigners by enterprise as well as to the individual archives of foreigners, which shall be updated according to the increase or decrease of the number of foreigners, change of posts, period of residence, time of entry into or exit out of China and change of incomes so as to carry into effect the scientific and fine administration over the individual income tax on foreigners.

IV.

Examination of the Established Accounts

All regions shall, according to the requirements of the State Administration of Taxation, improve by themselves the relevant mechanism and intensify the administration of archival materials by the end of June, 2006. Any region that fails to meet the requirement of the State Administration of Taxation of "establishing accounts by enterprise and establishing archives by individual " shall establish relevant rules and system as required as soon as possible so as to realize the objective of "administration by means of accounts and one archive for one person". All regions shall summarize their improvement on the administration of archival materials concerning the individual income tax on foreigners, which shall be reported to the State Administration of Taxation (Department of International Taxation) by July 31, 2006.

The State Administration of Taxation shall examine and summarize the administration of archival materials concerning the individual income tax on foreigners from July to December of 2006. The examination result will be circulated.

State Administration of Taxation

January 23, 2006