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China’s Expat Tax Change Forces Firms to Rethink Compensation

Dec. 16, 2021, 12:00 AM

Companies in China fear a loss of top talent due to an imminent change that will see the fringe benefits they offer to expatriates, such as housing and schooling, reclassified as taxable income.

The change kicks in Jan. 1, 2022, as China moves to equalize the tax treatment of its citizens and foreign residents. As of 2020, there were more than 845,000 foreign residents in China, excluding those from Hong Kong, Macau, and Taiwan.

“If the new tax policies as they’re stated go into full effect on Jan. 1, it is really going to have a significant burden ...