Before you start

Work permit and residence permit
Employment contract showing salary, allowance and equity structure
A contemporaneous record of days in and out of 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 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 as you go.
OnlineWho: You
2
Diarise the six-year rule from year one
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. Plan it in advance; it is invisible until it bites.
OnlineWho: You
3
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
4
Get advice on equity before your first vest, not after
Share awards from a Chinese or foreign employer are taxable in China when the relevant conditions are met, and the rules on how equity income is assessed and on preferential treatment for certain listed-company plans have changed over time. Whether the shares are in a Chinese or an overseas entity, and where you were resident when they were earned, both matter. This is the item most likely to produce an unpleasant surprise in a Hangzhou tech package.
Via employerWho: You
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. Each extension has arrived close to the deadline. Confirm the position each year with your employer's tax adviser.
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, claiming deductions and settling the difference. 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
Employment contract, payslips and equity award agreements
Employer withholding statements
Rental invoices (fāpiào) for any expatriate housing benefit claimed
Home-country tax residence certificate, where a treaty applies

Things most newcomers don’t know

Equity is where a Hangzhou tech package goes wrong, and it is the least-advised part of it.

A large share of senior compensation here arrives as restricted stock or options, in a Chinese entity or an overseas listed parent. Chinese tax treats share-based income as employment income when it is realised, the assessment rules and any preferential treatment for listed-company plans have been revised over time, and where you were tax resident when the award was earned affects how much of it China taxes. Employers withhold, but the reconciliation is yours. Get advice before the first vest, not after the tax bill.

Source: State Taxation Administration

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.

Source: State Taxation Administration

The expatriate benefits election is annual, locked, and usually the largest routine lever.

You choose once a year between the tax-exempt treatment of employer-provided housing, schooling, language training, meals, laundry, relocation, business travel and home leave, or the standard special additional deductions. It cannot be changed mid-year and it requires proper invoices collected as you go. For anyone with a housing allowance the expatriate route is normally worth considerably more.

Source: State Taxation Administration

The concession's expiry has moved repeatedly and needs checking annually.

The expatriate fringe-benefit treatment was due to end in 2021, was extended to the end of 2023, and MOF and STA Announcement [2023] No. 29 pushed it to 31 December 2027. Every extension has come close to the wire. Building a multi-year package around it without an annual check is how a compensation structure quietly becomes fully taxable.

Source: Ministry of Finance and State Taxation Administration Announcement [2023] No. 29