China expat taxes could see multinational exodus

More than a third of multinational businesses based in Shanghai say they may move some or all their operations out of China, when tax exemptions for foreign staff end next year.

The change, announced in 2019, will see non-taxable allowances on benefits including housing, schooling, food and language training, scrapped from January 1, 2022.

A report in the South China Morning Post said around 70 per cent of 102 companies surveyed by the American Chamber of Commerce (AmCham) 2020 China Business Survey said they would now find it more difficult to employ foreign workers. It estimated that a company would have to pay an additional 785,000 Yuan (US$122,000) in taxes for a family with two children, with the employee paying average extra tax of approximately $67,000.

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