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The State Administration of Taxation
Circular of the State Administration of Taxation on Income Tax Paid by the Enterprises with Foreign Investment and Foreign Enterprises
for their Employees on Behalf of their Enterprises Abroad
GuoShuiFa [1997] No.241
December 21, 1999
The salary and stipend of the employees who work in the enterprises with foreign investment or branches of foreign enterprises located
in our country are paid by both enterprises with foreign investment and foreign enterprises and enterprises abroad. It is required
whether salary and stipend paid by the enterprises abroad should be levied the income tax by the enterprises with foreign investment
and foreign enterprises within the territory of China on behalf of those abroad. Through study, it is clarified as follows:
I.
The salary and stipend of the employee who holds the post in the enterprises with foreign investment within the territory of China
should be paid by enterprises with foreign investment. If the enterprises with foreign investment inside our country have relationship
with the enterprises abroad, parts of or all the salary and stipend of the employees that must have been paid by enterprises with
foreign investment are paid by enterprises abroad. The enterprises with foreign investment inside our country should be responsible
for collecting the actual related material for application and paying income tax on behalf of the enterprises abroad according to
the Law of the People’s Republic of China on Individual Income Tax.
II.
The foreign enterprises that have established the institutions and branches in our country should be responsible for paying individual
income tax of salary and stipend of their employees paid by headquarters or related enterprises abroad according to the above regulations.
III.
The Circular shall enter into force as of January 1, 2000.
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The State Administration of Taxation
1999-12-21
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