China Insight: China's Six-Year Rule for Foreigners: Key Points for 2024

China's "Six-Year Rule," set to take effect in 2024, significantly impacts the taxation of foreign residents. Under this rule, individuals who live in China for 183 days or more each year are considered tax residents. If they remain as tax residents for over six years, they become liable for taxation on their global income, including foreign sources. The counting of the six years began on January 1, 2019, with specific criteria for determining residency. Importantly, foreigners can reset their six-year period by spending fewer than 183 days in any year or leaving China for over 30 consecutive days. High-income earners face substantial tax rates, reaching up to 45%, prompting many to strategize their residency to avoid individual income tax on overseas earnings. With the first enforcement of this rule approaching, it is crucial for expatriates to assess their residency status and plan accordingly to mitigate potential tax liabilities. Thank you for your attention. We are happy to take any questions you may have and clarify any points regarding China's Six-Year Rule for Foreigners.How to reach Kristina Koehler-Coluccia, Head of Business Advisory: Schedule a call here: https://meetings.hubspot.com/kristina12Email: [email protected] on WeChat with ID: kncolucciaConnect with Us:For more insights and updates, subscribe to China & Hong Kong Compliance Essentials.We are happy to take any questions you may have. How to reach Kristina Koehler-Coluccia, Head of Business Advisory:Schedule a call here: https://meetings.hubspot.com/kristina12Email: [email protected] on WeChat with ID: kncolucciaThank you for tuning in!