China Secondment: Tax Implications for Cross-border Labour Dispatch
E-Learning | Certificate Course
Along with the development of China’s economy and effects of globalization, an increasing demand for skilled resources in China exists. Multinational companies with entities in China have been identifying high potentials within their organizations to dispatch them on temporary secondment arrangements to China to assume key technical, management or other positions with the Chinese entity.
In this course the corporate income tax implications for organizations as well as the Individual income tax implications for secondees are discussed in detail. Attention goes out to the advantages of double taxation agreements may offer organizations, how to handle international taxation and avoid double payment of taxes between the jurisdictions as well as preferential treatments applicable, which have a mitigating effect on tax liabilities is discussed. Further, means of risk mitigation are discussed as it is imperative that secondment arrangements are well embedded in the organization and proof in regards of substantiating the genuine nature of the secondment arrangement, the non-resident home entity should be well documented.
Target audience
HR directors, HR managers, finance directors, finance managers and business owners from all industries who have an interest in facilitating temporary work of personnel in China via a secondment arrangement, and business professionals with an interest to work in China.
100% Online delivery
The course is designed to be completed fully online enabling students to continue working during the course.
Literature
The course covers all literature essential to acquiring the fundamental knowledge about the tax implications for the company and employee related to secondment arrangements to China.
Duration
The standard duration of the course is 4 weeks based on an average time commitment of 4 hours per week.
Objectives
- In this course you will develop a deeper understanding about structuring secondment assignments for your employees to China.
- You will learn to assess the tax implications for the home entity from where the employee is dispatched, for the China-based entity where the employee will take up a work assignment based on how the business activities are structured in combination with the details of the secondment assignments.
- You will develop an understanding of China’s payroll administration, individual income tax and social security systems
- You will develop a deeper understanding of the individual income tax implications for employees when working in China as secondee.
- You will gain insights into the risks associated with secondment and the means to mitigate these.
- You will develop an understanding of the classification and payment of secondment fees.
Unit 1: Introduction
The first unit provides an orientation to the course and the online learning environment. The unit does not carry credits. You are encouraged to go through the materials at their own pace to get accustomed to the online medium.
Unit 2: Introduction of the secondment arrangement
This section provides an outline of how secondment arrangements are structured, explaining how the legal employment relationship would exist between the home entity from where the employee is dispatched, the China-based entity where the employee will take up a work assignment and the secondee.
Unit 3: Permanent establishment in China
Generating income in China has income tax implications for the home entity, host entity and the dispatched employee. Depending on the bilateral agreements between China and the contracting country or non-state tax jurisdictions, the income derived from doing business in China may be subject to taxation in both locations. To determine corporate income tax implications in this chapter focus goes out to whether cross border secondment of personnel to China constitutes a permanent establishment.
Unit 4: Double taxation agreements
Double Taxation Agreements provide clarification on how to handle taxation and avoid double payment of taxes between countries and non-start jurisdictions. The agreements further outline possible preferential tax treatment for business and the eligibility criteria that have been agreed upon by the parties.
Unit 5: Tax implications for enterprises in China
This section focuses on the individual income tax implications of secondment of personnel to China, which varies depending on the juridical status of the enterprise in China, whether double taxation agreements have been concluded between China and the home country and to what extent the enterprise is eligible to enjoy these benefits, as well as the duration of secondment of personnel.
Unit 6: Payroll specification
This section explains how payroll in China is defined, focusing on gross income and its mandatory components, which is important to place the tax implications of secondment to China for the employee into perspective.
Unit: 7: China’s social security system
In this section the components of China’s social security system are discussed, the compliance requirements to wards employees in regards of calculation, and contribution as well as the determination of the maximum and minimum contributions.
Unit: 8 China’s individual income tax framework
In this section China’s Individual Income Tax framework is discussed in detail, starting with definition of resident and non-resident individuals under the relevant law and regulations. Next focus goes out to the determination of tax residency and taxability of income in China, followed by the determination of different types of income for individual taxpayers recognized under the new tax law.
Unit 9: What is comprehensive income, annual settlement and to whom does it apply?
This unit provides a detailed explanation of the different bases of income in China and how individual income tax for the types of income is treated in China. Following the steps which need to be taken to ensure tax compliance by the employee are discussed in detail.
Unit 10: Taxation of income of resident individuals
In this section focus goes out to the computation of taxable income in China of resident individuals, detailing on whether the income is borne by the home entity or China based entity, and whether the income is paid in China or abroad.
Unit 11: Taxation of income of non-resident individuals
The assessment whether the employment income of a non-resident individual who works both in China and overseas is subject to Individual Income Tax in China is relatively complicated as the sources of income and legal entities which are responsible to withhold taxes and bear the cost must be considered. This assessment is discussed in unit 11.
Unit 12: Individual income tax implications of secondment for dispatched personnel
Secondment to China might impose an individual income tax liability for the employee. In this section focus goes out to the assessment whether a secondee is liable for taxation in China, the calculation of tax and its effect on the net salary level of the secondee.
Unit 13: Taxation risks associated with secondment
Tax risk associated with secondment arrangement is considered to be of the nature of a service, resulting in an additional tax burden. In this section the means for mitigating risk by substantiating the genuine nature of the secondment arrangement in internal policy, procedures, and documentation to demonstrate the China based host entity holds the characteristics of an economic employer is discussed.
Unit 14: Payment of secondment fees
Secondment fees to be paid by the China based host entity to the non-resident home entity are classified by the tax authorities as outbound intercompany payments. The payment process is described in this section.
No specific prior education or knowledge is required to be admitted to this course.
Assessment
Assessment is carried out through a series of written assignments to be completed at the end of each unit.
Certificate of Completion
A Certificate of Completion is issued upon the successful completion of the course.
Tuition fee
Tuition fee for the entire course is EUR 899 to be paid in advance.
The tuition fee includes all necessary literature and study materials, guidance and support during your studies, free extension of the study duration (if required), and 1:1 contact with your course professor.
Start date
Open enrollment applies to this course. You can start this course at a timing of your own convenience.
How we deliver value
Program Completion Benefits
Certificate
Upon successful completion of the course, you will earn a digital certificate of completion from the Institute of China Studies.
Note: After successful completion of the online program, your verified digital certificate will be emailed to you in the name you used when registering for the program. All certificate images are for illustrative purposes only and may be subject to change at the discretion of the Institute of China Studies.
Contact us
Would you like more information about the course and the admission requirements? Then request a free study consultation. Of course, free of charge and without obligation. This way you will learn more about the content of the course, the teaching materials, and the online learning environment.
Enroll today
Enroll today and develop essential skills and insights understanding the tax implications of secondment of employees to China, which can be directly applied in your professional work environment.