(Source: https://pltfrm.com.cn)
Foreign artists or athletes performing in China are subject to specific tax regulations for the income they earn from their activities within the country. Here’s how this income is typically taxed:
- Individual Income Tax (IIT):
- Income earned by foreign artists or athletes from performances or activities in China is subject to IIT. As of my last update, the tax rate for such temporary activities could range from 3% to 45%, depending on the amount of income.
- Withholding Tax:
- The income is usually subject to withholding tax at source. This means the Chinese entity or organizer responsible for the payment is generally required to withhold the applicable tax amount from the payment made to the artist or athlete and remit it to the Chinese tax authorities.
- The withholding tax rate is often applied on a lump-sum basis, considering the nature of the income and the short-term engagement.
- Double Taxation Agreements (DTAs):
- If there is a DTA between China and the artist’s or athlete’s country of residence, it may provide specific provisions regarding the taxation of income from personal services. This can include reduced tax rates or exemptions, depending on the terms of the agreement.
- Calculation of Taxable Income:
- The taxable income may include not only direct performance fees but also other related income, such as endorsements, appearance fees, and winnings.
- Deductible Expenses:
- Certain expenses directly related to the performance or activity in China may be deductible when calculating taxable income. However, the scope of allowable deductions can be limited, and specific requirements must be met.
- Reporting Requirements:
- Compliance with Chinese tax filing and reporting requirements is important. In many cases, the Chinese payer will handle the tax compliance aspects, but the foreign artist or athlete should verify that this has been done correctly.
- Tax Treatments in Home Country:
- Artists and athletes also need to consider how this income is taxed in their home country. Many countries offer tax credits for taxes paid abroad, which can help avoid double taxation.
Given the complexities of tax laws and international taxation, foreign artists and athletes performing in China, as well as their agents or representatives, should seek professional advice to ensure compliance with Chinese tax regulations and to optimize their overall tax position. Proper planning can help manage their tax liabilities effectively in both China and their home country.
PLTFRM is an international brand consulting agency that works with companies such as Red, Tiktok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries exports in China account for 97% of the total exports in Asia. Contact us and we will help you find the best China e-commerce platform for you. Search pltfrm for a free consultation!
