# China Tax



## Sjladair (Aug 19, 2021)

Hello Forum, 

I start a 8 month project over in China next month and was wondering how this works with my Tax in home country UK. The company covers the tax in China on all my earnings in China. 
From what I can understand the tax rate on my salary in China will be in the 45% tax bracket. As the UK tax bracket is 40% does this mean I wont pay any tax to UK ? 

Appreciate your help with this 

Regards 
Scott


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## Moulard (Feb 3, 2017)

Quite possibly - but it will depend in part on domestic tax laws and the treaty.

Generally tax treaties require one country (the tax home) to offer a credit, deduction or other form of relief for taxes paid to the source country.

UK-China tax treaty is here





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China: tax treaties


Tax treaties and related documents between the UK and China.




www.gov.uk





Complicating matters may be the fact that you are there over 6 months. You will want to get advice on whether or not the length of your stay means you will be treated as a tax resident of China.

If both China and the UK can claim you as a tax resident then the treaty should have tie breaker rules in it.


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## Sjladair (Aug 19, 2021)

Moulard said:


> Quite possibly - but it will depend in part on domestic tax laws and the treaty.
> 
> Generally tax treaties require one country (the tax home) to offer a credit, deduction or other form of relief for taxes paid to the source country.
> 
> ...


Moulard - Thanks for the reply. I have discussed with my accountant who states that if i pay china tax at 45% then because this tax is higher than the UK Then nothing will be due in UK. I will be in China over 6 months, as long as I’m not taxed twice then I’m happy.


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## Dunedin (Aug 12, 2013)

Sjladair said:


> Moulard - Thanks for the reply. I have discussed with my accountant who states that if i pay china tax at 45% then because this tax is higher than the UK Then nothing will be due in UK. I will be in China over 6 months, as long as I’m not taxed twice then I’m happy.





Sjladair said:


> Moulard - Thanks for the reply. I have discussed with my accountant who states that if i pay china tax at 45% then because this tax is higher than the UK Then nothing will be due in UK. I will be in China over 6 months, as long as I’m not taxed twice then I’m happy.


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## Dunedin (Aug 12, 2013)

Scott expects to work in China for 8 months. Under the UK statutory residence test, he will remain a UK resident for UK tax purposes during that period. And of course under UK domestic rules, this means that his earnings while in China remain subject to UK tax.
The UK China double tax treaty confirms, under Article 15, that China has the right to tax this income.
Article 22 deals with double taxation. Article 22(2)(b) confirms that the UK should give credit for Chinese tax on that income.
The calculations of the tax, both in the UK and China, will take into account all the rates of tax, not just the highest marginal rates.


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