Delta Law Expat Services Desk ｜ Announcement on Continuing the Individual Income Tax Policy for Allowances of Foreign Individuals（《财政部 税务总局关于延续实施外籍个人有关津补贴个人所得税政策的公告》）, MOF/STA Announcement No. 29 [2023], in effect until 2027-12-31
- Announcement No. 29 [2023] is two sentences long. It preserves a choice between the itemised additional deductions and the exemption for certain expatriate allowances, and it runs to 2027-12-31.
- The election is available only to a foreign individual who meets the conditions of a resident individual under Article 1 of the Individual Income Tax Law. A non-resident does not reach the question.
- The two options cannot be combined, and once chosen the election cannot be changed within the tax year — a tax year being the calendar year.
- The Announcement names three earlier documents as the source of the exemption limb. It does not mention the 2018 notice that the 2021 extension was drafted against, and this page does not supply the link.
- 2027 is the last complete tax year covered. Whether anything follows is not stated in any text published as at the verification date of this page.
1. The document at a glance
| Item | Content |
|---|---|
| Full title | Announcement of the Ministry of Finance and the State Taxation Administration on Continuing the Implementation of the Individual Income Tax Policy on Relevant Allowances and Subsidies of Foreign Individuals（《财政部 税务总局关于延续实施外籍个人有关津补贴个人所得税政策的公告》） |
| Document number | 财政部 税务总局公告 2023 年第 29 号（MOF/STA Announcement No. 29 [2023]） |
| Adopted / promulgated | Dated 2023-08-18; issued jointly by the Ministry of Finance and the State Taxation Administration |
| Current version in force from | In effect until 2027-12-31; full text two articles; not amended to date |
| Issuing authority | Ministry of Finance and State Taxation Administration（财政部、税务总局） |
| Official text | https://fgk.chinatax.gov.cn/zcfgk/c102416/c5211526/content.html |
| What this page covers | Who may make the election, what it forecloses, and what "cannot be changed within a tax year" means in practice |
2. The threshold that gets skipped
The Announcement opens with a condition, not with the choice. Only a foreign individual who meets the conditions of a resident individual can make the election at all, and that status is defined in the statute.
第一条 在中国境内有住所，或者无住所而一个纳税年度内在中国境内居住累计满一百八十三天的个人，为居民个人。居民个人从中国境内和境外取得的所得，依照本法规定缴纳个人所得税。
在中国境内无住所又不居住，或者无住所而一个纳税年度内在中国境内居住累计不满一百八十三天的个人，为非居民个人。非居民个人从中国境内取得的所得，依照本法规定缴纳个人所得税。
纳税年度，自公历一月一日起至十二月三十一日止。
Article 1, paragraph 1: An individual who has a domicile within China, or who has no domicile but has resided within China for an aggregate of 183 days in a tax year, is a resident individual. A resident individual pays individual income tax under this Law on income obtained from within and from outside China. Paragraph 2: An individual who has no domicile and does not reside within China, or who has no domicile and has resided within China for an aggregate of less than 183 days in a tax year, is a non-resident individual. A non-resident individual pays individual income tax under this Law on income obtained from within China. Paragraph 3: The tax year runs from 1 January to 31 December of the Gregorian calendar.
Unofficial translation; the Chinese text as officially published prevails.
Three consequences follow directly. Resident status is determined per tax year, so a person may be a resident individual in one year and not in the next, and the availability of the election moves with that. The tax year is the calendar year, stated in paragraph 3 — which is what gives the words "within one tax year" in the Announcement their content. And a non-resident individual never reaches the election: the question does not arise. How days of residence are counted, and how the separate six-year rule operates for a person without domicile, are dealt with elsewhere (see Further reading).
3. The election itself
一、外籍个人符合居民个人条件的，可以选择享受个人所得税专项附加扣除，也可以选择按照《财政部 国家税务总局关于个人所得税若干政策问题的通知》（财税字〔1994〕020号）、《国家税务总局关于外籍个人取得有关补贴征免个人所得税执行问题的通知》（国税发〔1997〕54号）和《财政部 国家税务总局关于外籍个人取得港澳地区住房等补贴征免个人所得税的通知》（财税〔2004〕29号）规定，享受住房补贴、语言训练费、子女教育费等津补贴免税优惠政策，但不得同时享受。外籍个人一经选择，在一个纳税年度内不得变更。
二、本公告执行至2027年12月31日。
Article 1: A foreign individual who meets the conditions of a resident individual may elect to enjoy the itemised additional deductions for individual income tax, or may elect to enjoy the tax-exemption treatment for allowances and subsidies such as housing allowance, language training fees and children's education fees in accordance with the Notice on Certain Individual Income Tax Policy Issues (Cai Shui Zi [1994] No. 020), the Notice on Issues Concerning the Implementation of Exemption from Individual Income Tax on Relevant Subsidies Obtained by Foreign Individuals (Guo Shui Fa [1997] No. 54) and the Notice on Exemption from Individual Income Tax on Housing and Other Subsidies Obtained by Foreign Individuals in Hong Kong and Macao (Cai Shui [2004] No. 29), but may not enjoy both. Once a foreign individual has made the election, it may not be changed within one tax year. Article 2: This Announcement is in effect until 31 December 2027.
Unofficial translation; the Chinese text as officially published prevails.
Four features of the drafting matter.
The two limbs are structurally different. One limb is a statutory deduction regime; the other is an exemption regime resting on three named administrative notices dating from 1994, 1997 and 2004. The Announcement does not merge them — it puts them side by side and requires a choice.
The list of allowances is open. 「住房补贴、语言训练费、子女教育费等津补贴」 — the character 「等」 signals that the enumeration is illustrative. What falls inside it is governed by the three named notices, not by this Announcement.
「但不得同时享受」 is exclusivity, not optimisation. The prohibition is on enjoying both, so the analysis is not which items are individually better but which regime, taken as a whole, applies for the year.
「一经选择，在一个纳税年度内不得变更」 fixes the unit. The lock is the tax year, not the employment contract, the assignment period or the payroll cycle.
The statutory limb is defined by the Law rather than by the Announcement.
（一）居民个人的综合所得，以每一纳税年度的收入额减除费用六万元以及专项扣除、专项附加扣除和依法确定的其他扣除后的余额，为应纳税所得额。
本条第一款第一项规定的专项扣除，包括居民个人按照国家规定的范围和标准缴纳的基本养老保险、基本医疗保险、失业保险等社会保险费和住房公积金等；专项附加扣除，包括子女教育、继续教育、大病医疗、住房贷款利息或者住房租金、赡养老人等支出，具体范围、标准和实施步骤由国务院确定，并报全国人民代表大会常务委员会备案。
Article 6, paragraph 1(1): For a resident individual's comprehensive income, taxable income is the balance of income for each tax year after deducting expenses of RMB 60,000, the special deductions, the itemised additional deductions and other deductions determined in accordance with law. Paragraph 4: The special deductions referred to in paragraph 1(1) include social insurance contributions such as basic pension, basic medical and unemployment insurance, and housing provident fund, paid by the resident individual within the scope and standards prescribed by the State; the itemised additional deductions include expenditure on children's education, continuing education, major illness medical treatment, housing loan interest or housing rent, and support for the elderly, with the specific scope, standards and implementation steps to be determined by the State Council and filed with the Standing Committee of the National People's Congress.
Unofficial translation; the Chinese text as officially published prevails.
Two points about scope. The special deductions in paragraph 4 — social insurance and housing provident fund — are not part of the election; they sit outside it and continue regardless. Only the itemised additional deductions are on one side of the choice. And the six named categories partly overlap with the allowances on the other side, children's education and housing being the obvious pairs, which is why the two regimes are set up as alternatives rather than as complements.
4. How the policy reached 2027
The current Announcement is the third step in a chain, and each step is worth naming precisely because the documents do not all cross-reference one another.
《财政部 税务总局关于个人所得税法修改后有关优惠政策衔接问题的通知》（财税〔2018〕164号）规定的外籍个人有关津补贴优惠政策、中央企业负责人任期激励单独计税优惠政策，执行期限延长至2023年12月31日。
The preferential policy on relevant allowances and subsidies of foreign individuals, and the preferential policy on separate calculation of tenure incentives for heads of central enterprises, provided in the Notice on the Transition of Preferential Policies Following the Amendment of the Individual Income Tax Law (Cai Shui [2018] No. 164), are extended in effect until 31 December 2023.
Unofficial translation; the Chinese text as officially published prevails.
| Step | Document | Effect |
|---|---|---|
| 1 | 财税〔2018〕164 号 — Notice on the Transition of Preferential Policies Following the Amendment of the Individual Income Tax Law | Named in Announcement No. 43 [2021] as the source of the allowance policy for foreign individuals. Its full text was not obtainable from an official page in preparing this page; nothing in it is quoted or restated here. |
| 2 | 财政部 税务总局公告 2021 年第 43 号, dated 2021-12-31 | Extended that policy in effect until 2023-12-31. |
| 3 | 财政部 税务总局公告 2023 年第 29 号, dated 2023-08-18 | States the election in its own words, by reference to the three 1994 / 1997 / 2004 notices, and runs to 2027-12-31. |
One drafting detail is easy to miss and worth stating plainly: Announcement No. 29 [2023] does not mention 财税〔2018〕164 号 at all. It sets out the election by reference to the three older notices instead. This page reproduces what each document says and does not assert a relationship between them that neither states.
5. What "cannot be changed within a tax year" carries with it
The lock sentence is short, and three consequences follow from its wording alone.
The unit is the tax year. Because Article 1, paragraph 3 of the Law fixes the tax year as the calendar year, a person may in principle make a different election for a following year — the prohibition is on changing within a year, not on ever changing. Whether the conditions for the election are met in that following year is a separate question, since resident status is itself determined annually.
The prohibition is on changing, and the Announcement states no exceptions. Facts commonly change mid-year: a child starts or leaves school, rented housing is replaced by owned housing, an assignment is cut short, a family relocates. The Announcement does not provide that a change of circumstances reopens the election, and it does not provide the contrary either. It is silent, and this page does not fill the silence.
The employer sits inside the mechanism. Whichever limb applies, the party obliged to withhold operates it month by month, and for the deduction limb the Law imposes a duty.
居民个人向扣缴义务人提供专项附加扣除信息的，扣缴义务人按月预扣预缴税款时应当按照规定予以扣除，不得拒绝。
Article 11, paragraph 2: Where a resident individual provides the withholding obligor with information on itemised additional deductions, the withholding obligor shall, when withholding and prepaying tax on a monthly basis, make the deduction as prescribed, and shall not refuse to do so.
Unofficial translation; the Chinese text as officially published prevails.
The duty is stated flatly — 「不得拒绝」 — and it attaches to the deduction limb only. On the exemption limb, what an employer is doing is applying an exemption to items in the remuneration package, which depends on the three named notices and on the supporting records for those items. So the practical drafting question in a package or assignment letter is not which limb is better in the abstract, but whether the documents describe items that fit the limb actually elected, and whether the withholding treatment is consistent with it across the year.
6. Who runs into this, and how it is used
Three groups meet this most directly: individuals on assignment whose packages contain housing, schooling or language items; employers designing or renewing those packages for staff who are resident individuals; and anyone reviewing a multi-year assignment that will run through the end of the current policy period. In each case the sequence is the same — resident status first, then the election, then the documents that have to match it.
- Misconception: Every foreign individual working in China can choose. In fact: Announcement No. 29 [2023] opens with the condition that the person meets the conditions of a resident individual under Article 1 of the Individual Income Tax Law; a non-resident individual does not reach the election.
- Misconception: The better items can be taken from each side. In fact: 「但不得同时享受」 prohibits enjoying both, so the choice is between two regimes taken as wholes.
- Misconception: An election can be revisited when circumstances change during the year. In fact: the Announcement states that once made the election may not be changed within one tax year, and it provides no exception for a change of circumstances.
- Misconception: The election also covers social insurance and housing provident fund contributions. In fact: those are special deductions under Article 6, paragraph 4 of the Law and sit outside the election, which concerns the itemised additional deductions.
- Confirm resident-individual status for the tax year in question first, under Article 1 of the Individual Income Tax Law, since the election is conditioned on it and the status is determined annually.
- Check that the remuneration documents describe items that correspond to the limb actually elected — allowance items on the exemption limb, deduction information on the deduction limb — rather than a mixture of both.
- Treat the calendar year as the operative unit when planning package changes, given that the lock in the Announcement is stated in terms of a tax year, which Article 1, paragraph 3 of the Law fixes as 1 January to 31 December.
- Note that the Announcement is silent on mid-year changes of circumstance, and assess any such situation against the text as written rather than against an assumed exception.
- For assignments running past 2027, identify the point at which the current policy period ends and review the arrangement against whatever is published for later years, rather than assuming continuity.
- 《财政部 税务总局关于延续实施外籍个人有关津补贴个人所得税政策的公告》，财政部 税务总局公告 2023 年第 29 号，成文日期 2023 年 8 月 18 日，全文两条，执行至 2027 年 12 月 31 日。本文引用其第一条、第二条。官方原文 https://fgk.chinatax.gov.cn/zcfgk/c102416/c5211526/content.html
- 《财政部 税务总局关于延续实施外籍个人津补贴等有关个人所得税优惠政策的公告》，财政部 税务总局公告 2021 年第 43 号，成文日期 2021 年 12 月 31 日。本文引用其正文。官方原文 https://fgk.chinatax.gov.cn/zcfgk/c102416/c5202058/content.html
- 《中华人民共和国个人所得税法》，1980 年 9 月 10 日通过，现行为根据 2018 年 8 月 31 日第十三届全国人民代表大会常务委员会第五次会议《关于修改〈中华人民共和国个人所得税法〉的决定》第七次修正。本文引用其第一条、第六条第一款第一项与第四款、第十一条第二款。官方原文 https://fgk.chinatax.gov.cn/zcfgk/c100009/c5193028/content.html
- 本文提及但未引用条文的文件：《财政部 税务总局关于个人所得税法修改后有关优惠政策衔接问题的通知》（财税〔2018〕164 号）——经 2021 年第 43 号公告正文转引；《财政部 国家税务总局关于个人所得税若干政策问题的通知》（财税字〔1994〕020 号）、《国家税务总局关于外籍个人取得有关补贴征免个人所得税执行问题的通知》（国税发〔1997〕54 号）、《财政部 国家税务总局关于外籍个人取得港澳地区住房等补贴征免个人所得税的通知》（财税〔2004〕29 号）——均经 2023 年第 29 号公告正文援引。
- Status and timing note 效力与时点提示：Announcement No. 29 [2023] is in effect until 2027-12-31 and has not been amended as at the verification date of this page. No officially published text stating the position from 2028 has been located. The full texts of the four earlier documents named above were not obtainable from official pages in preparing this page, and no provision of any of them is quoted or restated here. All filing, reporting and annual reconciliation matters are subject to the current published requirements of the competent tax authority.
This article is general legal research and does not constitute legal advice; by law, a law firm may not guarantee case outcomes. 本文为一般性法律研究，不构成法律意见；依据法律规定，律所不得承诺办案结果。
