In the following, I will analyze and interpret in detail how to pay individual income tax on overseas income based on specific provisions and different situations.
1. The comprehensive income of a resident individual** outside China shall be combined with the domestic comprehensive income to calculate the tax payable.
This means that the comprehensive income of an individual resident outside the country, such as wages and salaries, remuneration for labor services, author's remuneration, royalties, etc., needs to be aggregated with the comprehensive income in China, and the tax payable shall be calculated in accordance with the provisions of the individual income tax law of the People's Republic of China.
2. The business income of a resident individual** outside China shall be combined with the domestic business income to calculate the tax payable.
This means that the overseas business income of resident individuals, such as the production and business income of individual industrial and commercial households, the production and business income of sole proprietorship enterprises registered in China by investors of sole proprietorship enterprises and individual partners of partnership enterprises**, etc., need to be summarized with domestic business income, and the tax payable shall be calculated in accordance with the provisions of China's individual income tax law.
If the loss calculated by the overseas business income of a resident individual in accordance with the relevant provisions of the Individual Income Tax Law and its implementing regulations, the taxable income within its territory or in other countries (regions) shall not be deducted, but it can be made up in accordance with the provisions of the Chinese tax law with the business income of ** in the same country (region) in subsequent years.
3. Income from interest, dividends and bonuses, income from property lease, income from transfer of property and incidental income (hereinafter referred to as "other classified income") of an individual resident outside China shall not be combined with domestic income, the tax payable shall be calculated separately.
This means that these types of foreign income do not need to be aggregated with domestic income, but the tax payable is calculated separately.
4. For the income of a resident individual outside China in a tax year, the income tax paid outside China is allowed to be credited from the tax payable in the tax year within the credit limit in accordance with the tax laws and regulations of the country (region) of the country (region) on income。This means that the income tax already paid by a resident individual abroad can be credited against the income tax payable in China within a certain limit.
It should be noted that the specific calculation method, tax rate and credit limit are subject to change in accordance with the provisions of the Individual Income Tax Law of the People's Republic of China and its implementing regulations. Therefore, in practice, it is advisable to consult a professional tax authority or lawyer to obtain the most accurate information.
In short, the payment of individual income tax on foreign income needs to be determined on a case-by-case basis. Resident individuals need to understand the type of foreign income they have and calculate and pay it in accordance with the provisions of China's individual income tax law. At the same time, residents also need to pay attention to the tax treaties and policy changes between China and the income** countries (regions) to obtain the latest tax information and preferential policies.