We explain the preferential income tax treatment on annual bonus for some tax residents in China (including expatriate staff) - now extended to end of 2023.
Optimizing Profit in a Dividend Repatriation by DTA: A Case Study
Optimizing Profit in a Dividend Repatriation by DTA: A Case Study April 27, 2021 Posted by China Briefing Reading Time: 5 minutes
Overseas investors who derive dividends from China are normally subject to a 10 percent corporate income tax (CIT) in China. The invested company that distributes the dividends or profits is obliged to withhold the relevant tax and file with the tax bureaus in charge.
However, per the provisions of double tax avoidance agreements (DTAs), overseas investors have a chance to enjoy a lower tax rate on China-sourced dividends if the overseas investor is a tax resident of the other party to a tax treaty and is the beneficial owner of the dividends, depending on the corresponding articles in the DTA.