Before you start

Work permit and residence permit
Employment contract showing salary and allowance structure
A contemporaneous record of days in and out of mainland China
Details of foreign income and any applicable tax treaty

Step-by-step

1
Determine residence status by counting days
An individual without a domicile in China who is present for 183 days or more in a calendar year is a tax resident for that year. Below that, non-resident and taxed on China-sourced income only. Keep the count from your passport stamps as you go — and note that crossing to Hong Kong is an exit from mainland China for this purpose.
OnlineWho: You
2
Diarise the six-year rule from your first year
Worldwide income becomes taxable only from the seventh consecutive year of 183-day residence, and the count resets if any year falls below 183 days or if you take a single trip abroad of more than 30 consecutive days. This is the highest-value planning item available to a long-stayer with assets outside China.
OnlineWho: You
3
Apply for the Greater Bay Area subsidy — it does not arrive automatically
Qualifying overseas high-end talent and talent in short supply can have individual income tax paid above a 15% effective rate refunded by the municipal government, and the refund is itself tax-exempt. You apply through the Shenzhen human resources bureau within an annual window, with employer support. Missing the window means missing the year.
OnlineWho: YouAnnual application window
4
Make the annual election between expatriate benefits and itemised deductions
Foreign nationals choose either the tax-exempt treatment of employer-provided housing, children's education, language training, meals, laundry, relocation, business travel and home leave, or the standard special additional deductions. Not both, and the election is locked for the tax year.
Via employerWho: YouStart of each tax year
5
Confirm the current expiry of the expatriate benefits policy
The concession has been given sunset dates and extended repeatedly; the most recent extension runs to 31 December 2027 — the same date as the Bay Area subsidy. Confirm the position each year rather than assuming.
Via employerWho: You
6
File the annual reconciliation, 1 March to 30 June
Residents reconcile the previous calendar year's comprehensive income through the Individual Income Tax app or the tax bureau. The obligation is yours even when the employer helps.
Mobile appWho: You1 March – 30 June

Documents you’ll need

Passport with all entry and exit stamps, including Hong Kong crossings
Employment contract and monthly payslips
Employer withholding statements
Rental and school fee invoices (fāpiào) for expatriate benefits claimed
Evidence supporting the Greater Bay Area talent classification, if applying for the subsidy

Things most newcomers don’t know

The Bay Area subsidy caps your effective rate at 15% and you have to ask for it.

A Ministry of Finance circular continues the preferential policy across the nine mainland GBA cities to 31 December 2027, refunding individual income tax paid above a 15% effective rate for qualifying overseas high-end talent and talent in short supply, with the refund itself tax-exempt. Against a 45% top band this is the largest single financial variable in a senior Shenzhen package. It is a municipal application with an annual window and locally-set qualifying criteria — nobody applies it for you.

Source: Ministry of Finance GBA individual income tax circular

One absence of more than thirty consecutive days resets the six-year clock.

China taxes a non-domiciled resident on worldwide income only from the seventh consecutive year of 183-day residence, and the count resets if any year falls below 183 days or contains a single absence exceeding 30 consecutive days. For anyone with overseas investments or a foreign business interest, planning that absence in year five or six is worth real money. It is invisible until it bites, which is why people find out in year seven.

Source: State Taxation Administration

A Hong Kong weekend is a day out of mainland China, and the day count is unforgiving.

Hong Kong is a separate customs and immigration territory, so a crossing is an exit from the mainland for the purposes of the 183-day test and the six-year rule's 30-day reset. In Shenzhen, where crossing is routine, this cuts both ways: frequent short trips do not help you reset the six-year clock because none of them exceeds 30 days, but they do matter to a marginal 183-day count. Track them like any other travel.

Source: State Taxation Administration

The expatriate benefits election and the Bay Area subsidy both expire on 31 December 2027.

The expatriate fringe-benefit exemption was extended by MOF and STA Announcement [2023] No. 29 to the end of 2027, and the Greater Bay Area subsidy circular runs to the same date. Both have histories of late extension. Any compensation package built around both should be re-examined annually, and a package negotiated for a five-year posting should not assume either survives the whole term without checking.

Source: Ministry of Finance and State Taxation Administration

Common mistakes to avoid

Never applying for the Greater Bay Area subsidy, or missing its annual window.
Not tracking days in and out of the mainland, including Hong Kong crossings.
Reaching year seven without ever taking a 30-day absence.
Claiming the housing exemption without collecting rental fāpiào.
Assuming the 2027 sunset dates on both concessions will automatically be extended.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.