Non-resident taxpayers, how should they apply for treaty benefits in China?-News and Insights-PKF KEXIN TAX FIRMS

Non-resident taxpayers, how should they apply for treaty benefits in China?

News and Insights2024-04-03Source: PKF KEXIN

In China, Non-resident taxpayers can handle the application for treaty benefits through a process of "self-assessment, self-declaration, and retention of relevant documents for future inspection." If non-resident taxpayers self-assess and determine that they meet the conditions for enjoying treaty benefits, they can enjoy these benefits at the time of tax declaration, or through the withholding agent at the time of withholding declaration. Meanwhile, they should collect and retain relevant documents as required for future inspection and accept the subsequent management by the China tax authorities.

 

For non-resident taxpayers who self-declare to enjoy treaty benefits, they should submit the "Information Report Form for Non-Resident Taxpayers to Enjoy Treaty Benefits" at the time of declaration. They should also collect and retain relevant documents as required.

 

In the case of source withholding and designated withholding, non-resident taxpayers should truthfully fill out the "Information Report Form for Non-Resident Taxpayers to Enjoy Treaty Benefits," proactively submit it to the withholding agent, and collect and retain relevant documents as required.

 

After receiving the "Information Report Form for Non-Resident Taxpayers to Enjoy Treaty Benefits," if the withholding agent confirms that the information filled out by the non-resident taxpayer is complete, they should withhold according to treaty provisions, and truthfully submit the "Information Report Form for Non-Resident Taxpayers to Enjoy Treaty Benefits" as an attachment to the withholding declaration to the competent tax authority.

 

If neither the non-resident taxpayer nor the withholding agent provides the relevant documents as required by the tax authorities, or if they evade, refuse, or obstruct the tax authorities from conducting further investigations, and the competent tax authorities are unable to verify whether they meet the conditions for enjoying treaty benefits, they should be considered as not meeting the conditions for enjoying treaty benefits, and it is necessary to recalculate the withholding income tax according to the domestic tax laws of China and pay overdue taxes and late payment interest. It is recommended to consult a tax advisor or local tax authorities to obtain the most accurate guidance.