Last Updated: April 2026
China's Individual Income Tax (IIT) system underwent a major overhaul in 2019, replacing the previous '5-year rule' with a new '183-day and 6-consecutive-year' framework. For foreigners and Chinese nationals living in China, understanding when worldwide taxation applies — and how to cleanly exit the Chinese tax system — is increasingly important as China tightens IIT enforcement for high-income residents. The SAT (State Administration of Taxation, now integrated into the STA — State Taxation Administration) requires tax clearance procedures for certain categories of departing residents, particularly those with significant income or assets.
China-to-USA migration includes H-1B tech workers, EB-5 investors, and family-based immigration — a major bilateral migration corridor. Key CN-US planning points:
China-USA DTA (1984): The 1984 China-USA Double Taxation Agreement (with 1986 Protocol) governs double taxation. Chinese dividends: 10% withholding under DTA (20% domestic rate — DTA provides a 10% reduction). Chinese pension: taxable in China under Article 19. FTC on US Form 1116 for Chinese IIT paid. The DTA has a saving clause for US citizens and green card holders — the USA taxes its citizens on worldwide income regardless of DTA.
CRS and FATCA compliance: China is a CRS jurisdiction — Chinese banks report US-resident account holders' information to the STA, which shares with the IRS. US FBAR: Chinese bank accounts over $10,000 must be reported on FinCEN Form 114. WeChat Pay and Alipay accounts: IRS guidance on reporting digital payment platforms is evolving — consult a US CPA.
Social insurance gap: No China-USA totalization agreement means no combining of Chinese and US Social Security years. Withdraw the Chinese pension individual account balance (employee portion only) on departure if no bilateral agreement exists.
Housing provident fund (公积金 — gōngjī jīn): Both employee and employer contribute to the Housing Provident Fund (HPF). Foreign nationals can withdraw their HPF balance on permanent departure — visit the Housing Provident Fund Management Centre in your city. HPF withdrawal is tax-free.
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Get International Health Cover from Day One →Possibly not yet — the key depends on whether you have completed 6 consecutive years in China without a single absence of 30+ consecutive days. The 6-year rule requires: (1) you are a non-domiciled resident (no Chinese hukou — typical for foreigners); (2) you have been present in China for 183+ days in each of 6 consecutive calendar years; AND (3) you have never taken a trip outside China of 30+ consecutive days in any of those years. If you have been in China for 4 years: you have not yet hit the 6-year threshold — your overseas income is NOT currently subject to Chinese IIT, regardless of the 183-day presence test. During years 1–5 (under 6 consecutive years): only Chinese-source income is taxed. At the start of year 7 (having met the 6-consecutive-year test): worldwide income becomes taxable. Planning option: if you want to prevent reaching the 6-year threshold, take a trip outside China of 30+ consecutive days at some point before completing year 6 — this resets the counter entirely.
SAT tax clearance (完税证明) documentation typically required: (1) Valid passport (with all China entry/exit stamps for the relevant years). (2) Residence permit or work permit (居留许可 / 工作许可证) and the cancellation or surrender notice from the relevant Bureau of Exit and Entry Administration. (3) Employment contract(s) and salary statements for the years covered. (4) Proof of IIT payments already made: withholding receipts (代扣代缴凭证) from your employer, or your self-filed IIT records if you filed independently. (5) Bank account details for any tax refunds due. The process: visit your district-level STA office (usually the one where your employer is registered or where you file). Some cities allow the clearance process online via the e-tax portal (电子税务局). For most foreigners whose IIT was fully withheld by employers: the clearance is typically straightforward and completed within 1–5 working days. The 完税证明 document: presented to your employer, bank, and the Exit-Entry Administration if required for visa cancellation. High-income individuals with complex tax situations (overseas assets, equity compensation, multiple income sources) should engage a China-based tax advisor for the clearance.
Yes — foreign nationals permanently leaving China can apply to withdraw the individual account (个人账户) portion of their Chinese pension insurance contributions. This is only the employee's own 8% contribution — not the employer's portion, which is pooled into the social insurance fund and not returned. How to withdraw: (1) Cancel your work permit and residence permit at the Bureau of Exit and Entry Administration. (2) Obtain the work permit cancellation certificate (外国人工作许可证注销证明). (3) Apply to the local Human Resources and Social Security Bureau (人社局) for the pension individual account lump-sum payment (个人账户一次性领取). (4) Required documents: passport, work permit cancellation certificate, bank account details. The withdrawal amount: your cumulative 8% employee contributions plus any investment returns credited to your individual account. Tax on withdrawal: the lump-sum withdrawal of individual account pension is currently treated as income — subject to IIT at the standard 3%–25% applicable rate depending on the monthly equivalent. Timing: apply after your work permit and residence permit are cancelled and before departing China (or grant a power of attorney to a representative if already departed). The housing provident fund (HPF) balance: apply separately at the Housing Provident Fund Management Centre — both employee and employer HPF contributions are returnable and tax-free.
Ongoing obligations for non-residents owning Chinese property: (1) Property tax (房产税): Shanghai and Chongqing have pilot property taxes at 0.4%–1.2% of assessed value for certain properties. Other cities do not have a general residential property tax (as of 2026). (2) Rental income: if you rent the Shanghai apartment, rental income is subject to 20% IIT (on 80% of gross rent after a deemed 20% deduction — effective rate 16%). Withholding: business tenants should withhold and remit the IIT. Individual tenants may not withhold — you must file and pay directly via the e-tax portal. (3) Property management: consider appointing a Chinese property management company (物业管理公司) or trusted person to handle the property and tax obligations locally. (4) Eventual sale: capital gains on selling the Shanghai apartment as a non-resident: 20% IIT on the gain; plus: deed tax (3%), VAT (5.6% on premium over purchase price if held <2 years), individual land use fees, and stamp duty. The combined transaction taxes on a Shanghai property sale can be 5–15% of the transaction. Engage a Shanghai-based real estate lawyer and accountant for the sale process. (5) Annual IIT filing: as a non-resident with ongoing Chinese-source rental income, you should file an annual IIT summary in China if required by your local tax bureau — or ensure the withholding at source is correctly handled.