Local Taxation Bureaus and Direct Sub-bureaus in Each District and County,
　　We hereby forward to you the Notice of State Administration of Taxation on Several Problems of Personal Taxation Agreement and Personal Income Tax for the Individuals Without Residence in China (Guo Shui Fa [2004] N0.97), please implement it.


　　Sept. 8, 2004



　　The State Administration of Taxation

　　Guo Shui Fa [2004] No.97

　　Notice of State Administration of Taxation on Several Problems of Personal Taxation Agreement and Personal Income Tax for the Individuals Without Residence in China

　　The state taxation bureaus, local taxation bureaus and each unit in bureaus in each province, autonomous region, municipality and city specially designated in state plan,
　　According to the Personal Income Tax Law of the People’s Republic of China (hereinafter referred to as the Tax Law) and its implementing rule and taxation agreements or arrangements signed between China and related countries or regions (hereinafter referred to as Agreements or Arrangements), we hereby clarify related matters concerning the personal income tax of the individuals without residence in China as follows:

　　1. How to calculate the number of residence days in China when determining tax payment
For the individuals without residence in China, we need to calculate his residence days in China to determine what taxpaying obligation he shall have according to the Tax Law and Agreements or Arrangements. The residence days shall be the actual days for which he stays in China. The date on which the individual enters China, exits China, goes to China and back or makes several times’ entry and exit shall be calculated as one day staying in China.

　　2. How to calculate the actual working days in China on the date when an individual enters and exits China
For those individuals who have posts in the departments both at home and abroad or those only hold a post in a department abroad without residence in China, while calculating his working days in China in accordance with Article 1 to the Notice of the State Administration of Taxation on Several Problems Concerning Personal Income Tax of Individuals without Residence in China (Guo Shui Han Fa [1995] No.125), the date on which the individual enters China, exits China, goes to China and back or makes several times’ entry and exit shall be calculated as a half day working in China

　　3. The formula to calculate the tax payable of the individuals having different taxpaying obligations
　　For the taxpayers whose taxpaying obligations are determined respectively in accordance with Article 2 to 5 to the Notice of the State Administration of Taxation on the Taxpaying Obligations for Salaries of the Individuals without Residence in China (Guo Shui Fa [1994] No.148), the following formulas shall be applied:

　　(1) For the individuals whose taxpaying obligations are determined in accordance with Article 2 to the Document Guo Shui Fa [1994 No. 148, the following formula shall be applied:
The tax payable = the taxable income at home and abroad in the very month * applied tax rate
　　(2) For the individuals whose taxpaying obligations are determined in accordance with Article 3 to the Document Guo Shui Fa [1994] No. 148, the following formula prescribed in Article 6 to the Document Guo Shui Fa [1994] No. 148 shall be applied:
　　The tax payable = the taxable income at home and abroad in the very month * applied tax rate
　　(3) For the individuals whose taxpaying obligations are determined in accordance with Article 4 or 5 to the Document Guo Shui Fa [1994] No. 148, the following formula prescribed in Article 4 to the Document Guo Shui Fa [1995] No. 125 shall be applied:
The tax payable = the taxable income at home and abroad in the very month * applied tax rate
If the above-mentioned individuals get salaries on daily basis or get the salary not for a full month, such salaries shall be converted to monthly salaries according to Section 2, Article 6 to the Document Guo Shui Fa [1994] No. 148, and then the individuals shall pay the income tax according to the above formulas.

　　4. The Clauses of Agreement or Arrangement applied to top management of enterprises
For the individuals without residence in China who hold a post in top management of an enterprise in China, if the clause on director’s fee of the Agreement or Arrangement signed between China and the country or region where the individuals locate hasn’t clearly included the top management members of enterprises, his taxpaying obligation may be determined in accordance with the clause on non-independent personal labor in the said Agreement or Arrangement and Article 2, 3, 4 to the Document Guo Shui Fa [1994] No. 148.
　　For those individuals without residence in China who holds a post in top management of an enterprise in China and meanwhile serves as the director of the enterprise or actually enjoy the right or a director or fulfill the responsibility of a director, his income which he gains from the enterprise in China, including that gained as both director and top management member, shall be all applied to the clause on director’s fee in Agreement or Arrangement and Article 5 to the Document Guo Shui Fa [1994] No. 148 to determine the taxpaying obligation of the individual.

　　5. This Notice shall come into effect as of July 1, 2004. If the former provisions are incongruous with this Notice, the provisions in this Method shall apply.