Individual income tax exemption in China

[honeybun]

Hi All:

 

I have a job offer from a Chinese university for a 2 year position, and the HR Dept. there is telling me that I can claim an exemption from Chinese individual income taxes during my time there. (see below)

 

One of the forms required to obtain this exemption is a Certification of US Tax Residency, which I would have to get from the US.

 

I have 2 questions about this:

 

1. Has anyone else gotten this exemption from Chinese individual income taxes?

 

2. Because, as part of obtaining this exemption, I would have to certify that I am a resident of the US for tax purposes, would I no longer be eligible to use the Foreign Earned Income Credit? In other words, would I then have to pay US taxes on all my China-earned income below $80k?

 

I would be extremely appreciative to receive guidance from anyone who has been through these issues. Thanks!

 

 

Individual tax exemption

Appointees from countries which have a tax agreement with Chinese government will be exempted from the Chinese individual tax for the first 2-3 years when he/she works at an institution in Mainland China.

 

 

[Randy W]

The U.S. does not have this agreement with the Chinese government - you will not be eligible, unless they can explain why you are.

 

But, yes - if the Chinese don't require you to pay any taxes, you are still eligible for the Foreign Earned Income Exclusion (see Form 2555), provided you pass the China residency test on that form.