China’s tax system can be complex and confusing, especially for foreigners who are not familiar with the country’s tax laws. As a result, many foreigners make mistakes when it comes to paying taxes in China.
In this blog post, we’ll discuss some of the most common tax mistakes made by foreigners in China and how to avoid them.
1. Failing to register with the tax authorities
One of the most common tax mistakes made by foreigners in China is failing to register with the tax authorities.
If you are working in China, you are required to register with the tax authorities within 30 days of starting work. Failure to do so can result in fines and penalties.
2. Failing to declare all sources of income
Another common tax mistake made by foreigners in China is failing to declare all sources of income.
If you have income from multiple sources, such as a salary from your employer and income from freelance work, you are required to declare all of your income to the tax authorities.
Failure to do so can result in fines and penalties.
3. Failing to keep accurate records
Keeping accurate records is essential when it comes to paying taxes in China.
If you fail to keep accurate records of your income and expenses, you may not be able to claim all of the deductions and exemptions that you are entitled to.
This can result in higher taxes and penalties.
4. Failing to file your tax return on time
Failing to file your tax return on time is another common tax mistake made by foreigners in China.
If you fail to file your tax return on time, you may be subject to fines and penalties.
It’s important to make sure that you file your tax return on time to avoid these penalties.
The tax return can be done via the Tax App named 个人所得税 that you can download from here.
5. Failing to seek professional tax advice
Finally, many foreigners in China make the mistake of failing to seek professional tax advice. If you are unsure about your tax obligations in China, it’s important to seek advice from a qualified tax professional.
A tax professional can help you understand your tax obligations and ensure that you are in compliance with Chinese tax laws.
In conclusion, paying taxes in China can be challenging, but avoiding these common tax mistakes can help you stay on the right side of the law.
Remember to register with the tax authorities within 30 days of starting work, declare all of your income, keep accurate records, file your tax return on time, and seek professional tax advice if you need it.