Tax free Policy
Tax & allowance policy

The University provides different categories of allowance to individuals based on each person’s employment contract with the University.


Chinese Staff

The allowances for Chinese staff are intended to contribute to either rental costs of housing, or as subsidy for personal travels, etc.  Such costs are treated as taxable.  This allowance is provided on a monthly basis.  If the commencement date of the employment with the University is not the first day of a month, then a pro rata housing allowance will be calculated based on the actual employment days of that month, instead of being provided in full.


Expatriate Staff

Individuals resident in China for more than 90 days are subject to tax on their China-source income. However nationals from various countries may be exempt from tax for a number of years, as detailed in the table below. (N.B. For details regarding countries not referred to in this table, please contact the Human Resources Department, Payroll Section on ext. 1045).

The claimed period of each month is from 16th last month to the 15th current month. The accepted claim would be paid with salary disbursement of most recent month. Any illegal invoice or application would not be claimed for individual.

The Allowance Claim for is filled by applicants. One line of the claim form is for one invoice only. The printed website sheet for exchange rate is required from the applicant if invoice out of China mainland is listed. The exchange rate can be found on the website http://www.gocurrency.com/index.htm.

Nationality
Tax free period (year)
Argentina
0
Australia
2
Brazil
2
Canada
0
Cyprus
2
Egypt
3
France
3
Germany
3
Greece
3
Hong Kong
0
India
3
Ireland
2
Italy
3
Malaysia
3
Mexico
3
New Zealand
2
Russia
3
Singapore
3
South Africa
2
Sweden
3
Thailand
3
UK
3
USA
3


 

 

The following items of remuneration are treated as non taxable:

N.B. For all non-taxable benefit claims, receipts must be submitted to the Human Resource Office for processing.
  • Relocation Allowance – The tax-free element of this applies only to the cost of transporting freight.  Other relocation expenses (e.g. furnishing, etc) may also be payable, but these will not be tax-free.  Travel expenses incurred in relocating may be claimable as a tax-free benefit under a Travel Allowance, see below.
  • Housing Allowance – This allowance is intended to contribute to the rental costs of housing provided by XJTLU, or rent payments to an external body.  These elements are tax-free.

 

Certain utility bills may also be tax-free (e.g. electricity, water), but only if they are included as part of the rental fee (although they may be itemised separately). If the employee has to make separate arrangements to pay such items, they are not tax-free.  

Housing allowance is provided on a monthly basis.  If the commencement date of the employment with the University is not the first day of a month, then a pro rata housing allowance will be calculated based on the actual employment days of that month, instead of being provided in full.

  • Travel Allowance – The tax-free element of this applies only to the individual employee, and covers the cost of up to two return trips home (the place of their Nationality) per calendar year.  This can include costs of transportation to and from the airport at either end.  Other travel expenses may be claimed under this allowance (e.g. travel for family including partner or children), but these will not be tax-free.

 

Please note: the Travel Allowance is not intended to cover regular journeys, such as travel from an employee’s home to the University.

  • Child Education – The claim must be for Education Fees.  Service Fees (such as are sometimes issued for private education) will not be tax-free.
  • Language Training – The claim must be for Language Learning Fees.  Service Fees or Consultancy Fees (such as are sometimes issued for private education) will not be tax-free.