Obtain a Certificate of Chinese Tax Resident: A Complete Guide 2025

By obtaining a certificate of Chinese tax resident, you can enjoy tax incentives, improve your international reputation, and, more importantly, save taxes! See how you can obtain the Certificate in 2025!

If you are a foreigner working and living in the Chinese mainland, you may have heard the terms ‘Chinese tax resident’ or ‘certificate of Chinese fiscal resident’ in your life, telling you how important they are. However, do you know what the terms mean, and why they are useful? In this guide, Hongda will provide a comprehensive introduction to what you need to know about the certificate of Chinese tax resident, helping you obtain the Certificate once you are qualified as a Chinese tax resident.

Why Do You Need a Certificate of Chinese Tax Resident?

A Certificate of Chinese Tax Resident is an official document that confirms an individual or company's tax residency status in China. It contains the information including the name of the taxpayer (either individual or company), the tax year, and the contracting state or jurisdiction where the Certificate is to be used.

This Certificate can be quite useful in several situations, especially when investors from countries with worldwide taxation are handling their international tax matters. It allows individuals and businesses to claim tax treaty benefits, avoid double taxation, and comply with tax regulations when dealing with foreign entities.

In addition, China has signed bilateral tax treaties with over 100 countries and regions to prevent double taxation and combat tax evasion, which also provide preferential tax policies, including reduced tax rates or exemptions. With the Certificate, you can prove that you have paid taxes in China to a foreign tax authority so that you will not be charged any tax twice from its side. This will also allow you to enjoy a lower tax rate and sometimes a tax refund, bringing you more advantages over your competitors.

The table below shows the key differences between a Chinese tax resident and a non-Chinese tax resident.

Table 1. Comparison of a Chinese tax resident and a non-Chinese tax resident

Who Is a Chinese Tax Resident?

A tax resident refers to an individual or entity that is considered liable for taxation in a country or region. This can be important because it determines where and how much tax you need to pay on your income as different tax policies may be implemented based on the country or region your tax residency status belongs to. As for China, tax residents fall into two categories: an individual tax resident pr a corporate tax resident.

1. Individual Chinese Tax Residents

Under China’s Individual Income Tax Law, you will be identified a Chinese tax resident if:

• You have a permanent residence in China.
  
• You stay in China for over 183 days* in a tax year, even without a permanent residence.

On the other hand, you are NOT considered a Chinese tax resident if you meet the following conditions:

• You have NO permanent residence in China and stay in the country for less than 183 days* in a tax year.
• You do not live in China on a long-term basis.

The 183-day rule is based on cumulative days spent in China during a tax year. Only stays over 24 hours in China will be counted as one residency day, while a partial stay of less than 24 hours does not count.

For example, Ms. Lee, a Hong Kong resident. is an employee in a Hong Kong company, and she is assigned by her company to work in Shenzhen. She arrives in Shenzhen on Monday morning, and travels back to Hong Kong after work on Friday. In this case, only Tuesdays, Wednesdays, and Thursdays will count as they are all full-day stays, leading to a total residency days of 156 days (considering there are 52 weeks in a year). Since Ms. Lee did not reach the 183-day threshold, she will NOT be considered a Chinese tax resident, so her incomes paid by her Hong Kong company is not taxable in China.

In addition, it is important to note that the term “permanent residence” does not only refer to a homeownership, but also is based on the household registration (户口/hukou), family ties, and economic interests. Let’s take the following individuals from the US as an example, where they are all considered Chinese tax residents.

• Sam’s wife and children primarily resides in China, and Sam maintains a close tie with them.
  
• Tom does not have a household registration (hukou) in China, but his primary income is earned in China from his job in Shenzhen.
  
• Peter lived in China for 184 days in the previous tax year with a valid visa or residence permit.
  

2. Corporate Tax Residents

A company can be considered a Chinese tax resident if:

• It is registered in China.
  
• It is registered in a foreign country or region, but it is managed from within China.
  

In other words, companies registered in China (such as WFOEs, Joint Ventures, or Representative Offices) will be considered a Chinese tax resident once it is successfully formed. However, if the company is registered overseas, the following factors needs to be considered when determining whether it is qualified as a Chinese tax resident:

1. Whether its decision-making is in China (Example: A US company organizes board meetings and makes key business strategies in China)
   
2. Whether its financial & accounting control is in China (Example: A UK company based in Longdon prepares its financial reports and budgets in China)
   
3. Whether its executives are based in China (Example: A Hong Kong company’s CEO, CFO, and COO live and operate from China)
   
4. Whether its main business operations are conducted in China (Example: A Korean e-commerce company runs development, operations, and customer service in China)
   

Before taking action to apply, you need to determine whether your company meets the criteria as a Hong Kong tax resident. According to the tax law of the Hong Kong SAR, companies incorporated or constituted in Hong Kong, or companies incorporated or constituted outside Hong Kong but managed or controlled in Hong Kong, can be considered Hong Kong tax residents. If you are unsure whether your company is qualified, you can simply book a meeting with Hongda for more information.

How to Apply for a Certificate of Chinese Fiscal Resident?

For Individual applicants, you need to prepare:

• Completed application form (you can download the form from your local tax bureau)
  
• Passport 
  
• Proof of residence in China (such as lease agreement or property ownership certificate)
  
• Proof of 183-day stay. You can print the exit and entry record from the National Immigration Department
  
• Proof of income
  

For corporate applicants, the application documents include:

• Completed application form
  
• Business license
  
• Tax registration proof
  
• Proof of the management in China (such as the board meeting records, the Article of Incorporation, and financial statements)
  

Once you have the documents ready, you will submit the application to the local tax bureau of your residence, or where the company is registered for corporate applicants. The process will usually take about 5 to 15 working days before it is delivered to you. The Certificate is only valid for the tax year when it is issued. Remember to re-apply and renew it in the following year!

Case Study of Applying Chinese Tax Resident Certificate

Case 1: A Chinese Company Collects Royalties from Hong Kong

Background

A mainland China company (let’s call it Company A) licensed its patented technology to a Hong Kong company with an agreement of a royalty payment of RMB 1 million. According to Hong Kong’s tax regulations, a local withholding tax of 16.5% is applied to royalty payments, leading to a high tax amount around RMB 165,000.

Analysis

According to the double taxation arrangement (DTAs) between the mainland China and Hong Kong, a lower tax rate (7%) for royalties paid to a Chinese mainland tax resident is implemented. If Company A can provide the Chinese Tax Resident Certificate, it can enjoy lower tax amount compared to a higher domestic rate in Hong Kong.

Solution

Hongda suggests that Company A apply for a Chinese Tax Resident Certificate from the Mainland China tax authorities. After obtaining the Certificate, the Hong Kong company can pay the royalty fees at a tax rate of 7%, resulting in a tax saving of RMB 95,000.

Case 2: A Chinese Engineer’s Dual Tax Payment Dispute

Background

A Chinese engineer was assigned to work in Germany from 2020 to 2022 and stayed in Germany for over 183 days annually. As a result, the German tax authorities considered him as a German tax resident and claimed tax payments over his global income, which led to a double taxation to his salaries earned from China. 

Analysis

As mentioned above, an individual will be identified a Chinese tax resident if he/she owns a permanent residence in China and his ‘center of vital interests.’ In this case, the engineer’s ownership to a property in China and his family members solidifies his Chinese tax residency, so that Germany may not tax his income earned in German.

Solution

Under Hongda’s suggestion, the engineer obtained a Chinese Tax Resident Certificate and submitted it to the German tax department. By indicating his tax residency status in China, his Chinese-sourced income was exempted from tax in Germany. Only his earnings in Germany were taxable.

Final Thoughts

Obtaining a Certificate of Chinese Fiscal Resident is an essential step for foreigners living or doing business in China. It helps confirm your tax residency status, allowing you to take advantage of tax treaty benefits, avoid double taxation, and comply with international tax obligations. Understanding who qualifies as a tax resident, whether individual or corporate, and how to apply for this certificate ensures that you stay compliant with Chinese tax laws while optimizing your tax position globally. Whether you are an employee or a business entity, securing this certificate can bring significant financial advantages, ensuring that you’re not taxed twice on the same income.