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	NOTICE OF THE STATE ADMINISTRATION OF TAXATION ABOUT THE COLLECTION OF INDIVIDUAL INCOME TAX FROM EMPLOYEES OF INSTITUTIONS OF INTERNATIONAL ORGANIZATIONS IN CHINA, FOREIGN EMBASSIES AND CONSULATES IN CHINA AND FOREIGN PRESS INSTITUTIONS IN CHINA

	(No. 808 (2004) of the State Administration of Taxation June 23, 2004)


SUBJECT : INDIVIDUAL INCOME TAX; INTERNATIONAL ORGANIZATIONS, FOREIGN EMBASSIES AND CONSULATES AND FOREIGN PRESS INSTITUTIONS
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 06/23/2004
IMPLEMENT DATE : 06/23/2004
LENGTH : 684 words
TEXT :

For the purpose of strengthening the administration over the collection of individual income tax and preventing tax evasion, in accordance with the Individual Income Tax Law of the People's Republic of China and the Law of the People's Republic of China on the Administration of Tax Collection, the issues concerning the administration over the individual income tax on employees of institutions of international organizations in China, foreign embassies and consulates in China and foreign press institutions in China are hereby clarified as follows:

I. According to the Vienna Convention on Diplomatic Relations and the articles of association of the international organizations, all Chinese and foreign employees of the institutions of international organizations in China, foreign embassies and consulates in China and foreign press institutions in China shall pay individual income tax in pursuance of the Individual Income Tax of the People's Republic of China.

II. According to the international practices, if the non-diplomatic foreign employees of foreign embassies and consulates in China are "permanent residents", they shall pay individual income tax in the country where they reside, but there is no explicit legal definition or interpretation to the "permanent residence" in the tax law of our country, thus for the time being, no individual income tax may be levied on foreign employees who only work for the institutions of international organizations in China, foreign embassies and consulates in China or foreign press institutions in China.

Within the territory of China, if a foreign employee of an institution of international organization in China, foreign embassy or consulate in China or foreign news agency based in China obtains any income from non-official business, he shall pay individual income tax.

III. In accordance with the Individual Income Tax Law of the People's Republic of China, as for the individual income tax levied on Chinese employees of the institutions of international organizations in China and foreign embassies and consulates in China, the entities or individuals who directly pay the incomes shall act as the withholding agents. Considering the special circumstances of the institutions of international organizations in China and foreign embassies and consulates in China, the tax organs at various levels may, for the time being, not require the institutions of international organizations in China and foreign embassies and consulates in China to perform the duty of withholding individual income tax.

IV. Considering that the Beijing Diplomatic Personnel Service Bureau and the foreign affairs service entities designated by the people's governments of all provinces (municipalities directly under the Central Government) can collect the information of the Chinese employees in the institutions of international organizations in China and foreign embassies and consulates in China, in accordance with Article 44 of the Detailed Rules Concerning the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection, all administrative tax organs may authorize the diplomatic personnel service institutions to collect the individual income tax on Chinese employees. All administrative tax organs shall strengthen their contact with the diplomatic personnel service institutions so as to timely handle the formalities for authorized collection of individual income tax from the institutions of international organizations in China and foreign embassies and consulates in China.

V. All diplomatic personnel service institutions that accept the authorization to collect individual income taxes shall take effective measures to collect the information about the incomes of Chinese employees of the institutions of international organizations in China and foreign embassies and consulates in China. They shall, in strict compliance with the law, collect and make tax payments and shall notify the administrative tax organs relevant information every month.

VI. The bureaus of local taxes of Beijing, Shanghai, Guangdong, Sichuan and other provinces (municipalities) where there are foreign press institutions shall regularly ask the offices of foreign affairs of the people's governments at the province level for Foreign Press in China so as to learn about and gather the information about the local foreign press and the changes of foreign employees, and on the basis of the said information, require the said foreign press to withhold individual income tax on Chinese and foreign reporters and employees.