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High-Tax
Country Resident Planning To Stay Put:
China
If
you are resident and domiciled in China
(which will be the normal situation for
a native-born Chinese individual) then
you are taxable on your world-wide income.
There is a monthly personal allowance
of RMB4,800; after that, most income is
taxed at progressive rates from 5% to
45%, which applies to monthly income in
excess of RMB100,000.
Employed
individuals pay social security taxes
of about 8%; the employer pays about 20%.
Contributions to private pension plans,
often termed 'enterprise annuities', and
mostly free of tax.
There is no wealth tax, but the authorities
are considering the introduction of an
inheritance tax at high rates.
NB:
The Chinese tax rules are considerably
more complicated than the above simplified
summary, and professional advice on the
situation of any particular individual
is a necessity.
China's
new Enterprise Income Tax law has introduced
a set of modern anti-avoidance paraphernalia,
including CFC rules, a GAAR, transfer
pricing etc. But the individual sector
remains mostly free of such rules, and
Chinese residents have felt free to accumulate
overseas corporate and trust assets; it
remains to be seen for how long these
freedoms will remain in place.
For
an individual wishing to explore the investment
opportunities further afield, www.lowtax.net
contains details of the investment and
tax regimes for 50 offshore jurisdictions.
NB: The suggestions given above do not
constitute investment advice. They are intended
only to assist individuals in finding appropriate
professional advice, which is essential
for anyone planning offshore investment.
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Lowtax Network Portal