Criteria for Individuals to Be Considered Chinese Tax Residents

Criteria for Individuals to Be Considered Chinese Tax Residents

1. Resident individual

An individual is a resident individual if either condition applies:

• They have domicile in China; or
• They do not have domicile in China, but have resided in China for 183 days or more in a tax year.

2. Non-resident individual

An individual is a non-resident individual if either condition applies:

• They have no domicile in China and do not reside in China; or
• They have no domicile in China and have resided in China for less than 183 days in a tax year.

3. Tax year

The tax year is the calendar year, from January 1 to December 31.

4. Domicile

Domicile means habitual residence in China based on factors such as:

• domiciliary registration, (e.g. Chinese ID, Chinese nationality)
• family ties,
• economic interests.

Habitual residence is a legal criterion for defining a taxpayer. It does not mean actual residence or physical presence for a particular period of time.

Example:
If an individual leaves China to stay, work, visit family, or tour elsewhere, but is expected to return to reside in China, China may still be their habitual residence.

Simple decision rule

Situation	Tax status
Has domicile in China	Resident
No domicile + resided in China 183 days or more in tax year	Resident
No domicile + resided in China less than 183 days in tax year	Non-resident
No domicile + does not reside in China	Non-resident

Tax Impact:

Under the Individual Income Tax Law, having a domicile in China makes you a resident taxpayer, which means you are generally subject to individual income tax on your worldwide income (both domestic and foreign sources), not just income earned inside China.

The Six-Year Rule:

Foreign individuals who do not have a domicile in China may benefit from special rules (such as the six-year rule) that can limit or exempt certain foreign-source income from Chinese taxation under specific conditions. (e.g. foreign sources income from HK)