Good news: the tax-free benefit policy for Foreigners will be extended for another two years, from January 1, 2022

According to the Notice on the Connection Issues of Preferential Policies after the Revision of the Individual Income Tax Law ("Cai Shui [2018] No. 164") issued at the end of 2018, among them, the preferential policy on tax-free allowance for foreign employees until December 31, 2021, is a matter of great concern to the public.

In this context, in order to further reduce the burden of taxpayers, the Ministry of Finance and the Tax Bureau of China issued a new policy on December 31, 2021 (Announcement No. 43 of 2021 by the Ministry of Finance and the State Administration of Taxation), in which the preferential policy on allowances for foreign employees under Cai Shui [2018] No. 164 is extended to December 31, 2023. This will allow foreign employees to continue to enjoy tax exemptions for housing subsidies, language training fees, and children's education fees allowances in 2022, 2023.