China has one rule every long-stay foreigner needs to know: the six-year rule. As long as you haven't spent six full years in a row in China, your foreign income paid from abroad isn't taxed there, even while you live there full time. One long trip home each year is enough to keep it that way.
This guide covers Chinese individual income tax (IIT) for foreigners moving to or living in mainland China in the 2026 tax year: the six-year rule, the 183-day test, the 3% to 45% rates, tax-free allowances, social insurance, crypto and visas. Hong Kong and Macao have their own tax systems and aren't covered here.
The key question is simple. How many years in a row have you spent at least 183 days in China without a trip abroad of more than 30 days?
What's changed: the six-year count started in 2019, so 2025 was the first year anyone could be taxed on worldwide income under it, with returns due by 30 June 2026. Tax-free allowances for foreign employees run until 31 December 2027. Shanghai's social insurance cap rose to CNY 37,731 a month from 1 July 2026. British citizens can visit visa free for up to 30 days from 17 February 2026.
📋 China tax at a glance for 2026
Topic | Details |
|---|---|
Tax year | The calendar year, 1 January to 31 December |
Tax system | Worldwide income for residents. Foreigners keep foreign income paid from abroad untaxed until they've had six qualifying years in a row |
Top income tax rate | 45% on taxable comprehensive income above CNY 960,000, after a CNY 60,000 basic deduction |
All-in on a US$100k salary | About 24% in Shanghai (CNY 670,000, including social insurance), or less with tax-free allowances |
Dividends, interest, capital gains | 20% flat |
Crypto | Exchanges and trading services banned. No specific tax rule; a gain would most likely be taxed at 20% |
Residence at a glance | Getting in: 183 days in a calendar year, counting only full days. Leaving: a clean break once you're under 183 days, with no exit tax |
Double tax treaties | 111 signed and 108 in force (end of July 2025) |
US dollar figures use CNY 6.7 to US$1 (the US Federal Reserve's rate was CNY 6.69 on 9 October 2026), so US$100k is about CNY 670,000.
The six-year rule
Why are some long-stay foreigners taxed on foreign income and others not? The six-year rule, set by the Ministry of Finance and the State Taxation Administration (STA) in Announcement 2019 No. 34.
Image 1 — for six years, China leaves foreign income untaxed
If you're not domiciled in China, which covers almost every foreigner, you're resident in any year you spend 183 days or more there. What you're taxed on then depends on the six years before:
Six qualifying years in a row: if you spent 183 days or more in China in each of the previous six years, and never left for more than 30 days in one trip in any of them, you're taxed on your worldwide income.
Anything less: if any one of those six years falls short, your income from outside China that's paid by a foreign company or person is exempt for the year. Your income from China is taxed as normal.
The count started in 2019. Someone who has lived in China since then without a single trip abroad of more than 30 days had six qualifying years by the end of 2024, so 2025 was the first year their worldwide income could be taxed.
Breaking the chain is simple. A year in which you spend fewer than 183 days in China, or take one trip abroad of more than 30 days, restarts the count. That's why many long-term residents plan a trip home of more than 30 days every few years. It has to be one trip: several shorter ones don't count.
Two points to watch. Pay for work you do in China is Chinese income wherever it's paid, so the rule doesn't cover your salary or fees. And the implementing regulations say you record the exemption with your tax office, so don't just leave foreign income off your return.
👉 Chinese government: Announcement 2019 No. 34 (in Chinese)
When you become tax resident in China
You're resident in China for a calendar year if you're domiciled there, or if you spend 183 days or more there in that year. Domicile means habitually living in China because of household registration, family or economic ties, so it rarely applies to foreigners.
Days are counted strictly. A day only counts if you're in China for the full 24 hours, so the days you arrive and leave aren't counted.
Below 183 days you're non-resident and only taxed on income from China. If you spend 90 days or fewer in China in a year, pay for work there from a foreign employer, not charged to a Chinese branch, is exempt.
Leaving is a clean break. Fall below 183 days in a calendar year and you're non-resident for that year. China has no exit tax for foreigners. If you owe tax, though, the tax authority can stop you leaving until you pay or give a guarantee. Non-residents with income from China that wasn't taxed at source file before they leave for good.
👉 State Taxation Administration: Individual Income Tax Law (article 1, residence)
Income tax rates for 2026
Residents are taxed on their yearly "comprehensive income": salary, fees for services, author's fees and royalties added together. You deduct a basic CNY 60,000, your social insurance and some other items, then apply these rates:
China income tax rates for comprehensive income in 2026
Taxable income | Rate |
|---|---|
Up to CNY 36,000 | 3% |
CNY 36,001 to CNY 144,000 | 10% |
CNY 144,001 to CNY 300,000 | 20% |
CNY 300,001 to CNY 420,000 | 25% |
CNY 420,001 to CNY 660,000 | 30% |
CNY 660,001 to CNY 960,000 | 35% |
Over CNY 960,000 | 45% |
Source: Individual Income Tax Law, article 3 and rate schedule 1, unchanged since 2019.
Interest, dividends, rent, gains on property and one-off windfalls are taxed separately at a flat 20%.
Tax-free allowances for foreign employees
Residents can claim set deductions for things like children's education, rent and elderly parents. Foreigners can instead take housing, language training and children's education allowances tax free. The housing allowance has to be paid in kind or as reimbursement of actual costs, with receipts. You choose one option per tax year and can't switch during the year. This choice runs until 31 December 2027.
Worked example
You're a foreign employee in Shanghai, resident in China for 2026 and earning CNY 670,000 (about US$100k).
You pay social insurance of about CNY 47,541: 10.5% of pay up to the CNY 37,731 monthly cap.
After the CNY 60,000 basic deduction and your social insurance, your taxable income is CNY 562,459 and your income tax is CNY 115,818.
Your all-in bill is about CNY 163,359, or 24% of your salary. If your employer also pays CNY 15,000 a month of your rent as a tax-free housing allowance within the same package, the all-in cost falls to about 17%.
Freelancing in China
The hardest part of freelancing in China isn't the tax, it's the visa. There's no freelance or self-employment permit for foreigners: work permits are tied to a Chinese employer.
If you do become resident and earn fees for services, they're part of your comprehensive income. Only 80% of what you receive is counted, then the CNY 60,000 deduction and the normal rates apply. On US$100k of fees, that's about 13%. The social insurance rules for foreigners apply to people employed in China, so a self-employed foreigner doesn't pay compulsory contributions.
Fees for work you do while in China are Chinese income, even with clients and a bank abroad, so the six-year rule doesn't cover them. With no employer withholding tax, you file and pay yourself.
Crypto, investments and pensions
Is crypto legal in China? Since September 2021, every business activity involving virtual currencies, including exchanges and trading services, has been illegal financial activity in mainland China. That includes foreign exchanges serving people in China online, and contracts linked to crypto speculation may not be enforceable.
There's no tax rule written for crypto. The nearest official guidance is a 2008 STA reply (Guoshuihan 2008 No. 818), which taxes profit from buying virtual currency online and selling it on as a gain on property at 20%, after deducting what you paid. It was written for online game currency, but it points to the same treatment for crypto: a gain on property, taxed at 20%. During your first six years, a gain on crypto held abroad might fall under the six-year exemption, but nothing official says where crypto is located, so don't rely on it.
Other investments are taxed like this:
Dividends and interest: 20% flat.
Gains on shares and other property: 20% on the gain.
Rental income: 20%, or 10% on a home let as housing, after deducting 20% of the rent (or CNY 800 a time on rent of CNY 4,000 or less).
Foreign investment income: exempt under the six-year rule if it's paid from outside China. Once you have six qualifying years, it's taxed at 20%, with credit for foreign tax paid up to the Chinese tax on the same income.
The law exempts basic state pensions paid under China's own rules. It doesn't say how a foreign pension is taxed once the six-year rule stops protecting it, so take advice before your seventh year.
China has no inheritance tax, gift tax or wealth tax for individuals.
👉 Ministry of Finance: 10% rate on income from letting homes, Caishui 2008 No. 24 (in Chinese)
👉 People's Bank of China and others: notice on virtual currency trading risks, 2021 (in Chinese)
Social security for foreign employees
Since 15 October 2011, foreigners working legally in China for a Chinese employer must join the five social insurance schemes: pension, medical, work injury, unemployment and maternity. Your employer must register you within 30 days of your work permit being issued.
Contributions depend on the city. In Shanghai, employees pay 8% for pension, 2% for medical insurance and 0.5% for unemployment insurance (the latest published rate, set for 2025), and employers pay about 26%. Contributions are charged on pay up to a cap, which in Shanghai is CNY 37,731 a month from 1 July 2026. If you leave China for good, you can ask for your personal pension account to be paid out as a lump sum.
China has signed social insurance agreements with Germany, South Korea, Denmark, Finland, Canada, Switzerland, the Netherlands, France, Spain, Luxembourg, Japan and Serbia, and with Kyrgyzstan in 2025. If you're from one of them, the agreement decides which schemes you join. There's no agreement with the UK or the United States.
👉 State Council: 8% employee pension contribution (in Chinese)
👉 Shanghai Human Resources and Social Security Bureau: contribution base and 2026 cap (in Chinese)
👉 Shanghai Healthcare Security Bureau: medical insurance rates for 2026 (in Chinese)
👉 Chinese government: the countries with a social insurance agreement with China (in Chinese)
Double tax treaties
Does China have double tax treaties? Yes. By the end of July 2025, China had signed double tax agreements with 111 countries and regions, 108 of them in force, plus separate arrangements with Hong Kong and Macao. Partners include the UK, the United States, Germany, France, Japan, Singapore, Australia, Canada and the UAE.
If you're resident in China and another country at once, the treaty's tie-breaker decides where you're treated as resident. Treaties can also exempt short assignments of up to 183 days from Chinese tax on your salary.
👉 State Taxation Administration: list of China's tax treaties (in Chinese)
Visas: there's no digital nomad visa
China has no digital nomad or remote work visa. These are the main routes:
China visa routes for longer stays in 2026
Route | What it allows | Main limits |
|---|---|---|
Visa-free entry | Stays of up to 30 days for business, tourism, family visits, exchanges or transit, for passport holders of the countries on the list. British citizens qualify from 17 February 2026 to 31 December 2026 | Not for work. Each stay is limited to 30 days |
240-hour visa-free transit | Up to 10 days in permitted areas for citizens of 57 countries, including the UK | You must be travelling on to a third country, with a confirmed onward ticket |
Z (work) visa | Work for an employer in China, followed by a work residence permit | Needs a work permit arranged by the Chinese employer |
👉 Chinese Consulate-General in Manchester: visa-free entry for British citizens (in Chinese)
👉 Shanghai Foreign Affairs Office: 240-hour visa-free transit and the 57 countries (in Chinese)
👉 Ministry of Justice: Regulations on the Entry and Exit of Foreigners, visa types (in Chinese)
Who is China good for?
How does China compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including social insurance. The Retirees and Investment income ratings count the six-year rule, which covers every new arrival who keeps foreign income paid abroad.
☑️ Who is China good for? Tax ratings for expats in 2026
Expat profile | China rating | Why |
|---|---|---|
Employees | Moderate (Good with tax-free allowances) | About 24% all-in on US$100k (CNY 670,000) in Shanghai, including 10.5% social insurance up to the cap. Tax-free allowances can bring this under 20%, but only for costs your employer actually pays. |
Freelancers (self-employed) | Good | About 13% on US$100k: only 80% of fees is taxed, with no compulsory social insurance. The catch is the visa: there's no permit for freelancing. |
Retirees | Excellent | 0% on a US$40k foreign pension plus US$20k of foreign investment income paid from abroad, under the six-year rule. Afterwards, investment income is taxed at 20%. No inheritance or wealth tax. |
Crypto gains | Moderate | Crypto exchanges and trading services are banned. There's no specific rule, but a gain would most likely be taxed as a gain on property at 20%. |
Investment income | Excellent | A foreign portfolio paid outside China isn't taxed under the six-year rule. Once that ends, dividends, interest and gains are taxed at 20%. |
Digital nomad visa | Poor | No digital nomad visa. Many nationalities, including British citizens, can visit visa free for 30 days, but working needs a Z visa through a Chinese employer. |
Filing and deadlines
The tax year is the calendar year. Employers withhold tax from salaries each month. After the year ends, you file an annual reconciliation return between 1 March and 30 June if you need one: for example if you had more than one source of comprehensive income, earned fees for services, paid too little through withholding, or want a refund. For 2026, that window is 1 March to 30 June 2027.
Foreign income: residents taxed on foreign income report it between 1 March and 30 June of the following year.
Business income: pay tax within 15 days after each month or quarter, with the annual return by 31 March.
Income with no withholding: file by the 15th of the following month.
Leaving China: non-residents with untaxed income from China who are leaving for good file before they go.
You can ask your employer, or someone else you appoint, to file the annual return for you.
👉 State Taxation Administration: Announcement 2018 No. 62 on self-filing, including foreign income
Frequently asked questions
What is China's six-year rule?
Foreign income paid from abroad is exempt for foreigners unless they've spent 183 days or more in China in each of the previous six years, with no single trip abroad of more than 30 days. The count started in 2019.
How many days make you tax resident in China?
183 days or more in a calendar year. Only full days count: a day is counted if you're in China for the whole 24 hours, so arrival and departure days aren't.
What are China's income tax rates in 2026?
Comprehensive income is taxed at 3% to 45%, with the 45% rate above CNY 960,000 of taxable income, after a CNY 60,000 basic deduction. Interest, dividends, rent and gains on property are taxed at 20%.
Do foreigners pay social insurance in China?
Yes, if you're employed in China, unless a social insurance agreement says otherwise. In Shanghai, employees pay 10.5% of pay up to CNY 37,731 a month.
How is crypto taxed in China?
Crypto exchanges and trading services are banned in mainland China. There's no specific tax rule for an individual's crypto gain, but it would most likely be taxed as a gain on property at 20%.
Does China have a digital nomad visa?
No. Many nationalities, including British citizens until 31 December 2026, can visit visa free for up to 30 days, but not to work. To work in China you need a work permit and a Z visa arranged by a Chinese employer.
Where to go next
👉 Best countries for investors
👉 Best countries for entrepreneurs
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
