Laws of the People's Republic of China

The State Administration of Taxation

Circular of the State Administration of Taxation on the Relevant Executive Standards for the Individual Income Tax Exemption of Family Visit Expenses Obtained by Foreign Individuals

GuoShuiHan [2001] No.336

May 14, 2001

Taxation bureau of every province, autonomous region, municipality directly under the Central Government and municipality separately listed on the State plan:

Recently, we have received some reports that, in accordance with Article 4 of the "Circular of the State Administration of Taxation on the Execution of the Individual Income Tax Exemption for Relevant Subsidies Obtained by Foreign Individuals,"(GuoShuiFa [1997] No.54) if the individual income tax on family visit expenses obtained by a foreign individual is to be exempted, the taxpayer shall provide documents (duplicates) on the payment for his or her travel to visit family, and such documents shall be examined by the competent taxation organ. The individual income tax may be exempted for the actual expenses for family visits, as well as for a reasonable portion of the standard governing the expenses and occurrence of annual family visits. However, in the execution of the law, it is necessary to further clarify "the reasonable portion of the standard governing the expenses and occurrence of annual family visits." This issue is hereby addressed uniformly as follows:

I.

The family visit expenses for which preferential treatment for individual income tax exemption may be enjoyed shall only be limited to the expenses paid by a foreign individual for travel between the location of his/her employment in China and his/her home (including the dwelling place of his/her spouse or parents) by vehicle for no more than twice every year.

II.

This Circular shall come into force as of the date of its implementation; family visit expenses which occurred before this Circular had come into force and which have not been treated for taxation shall also be executed in accordance with this Circular.