State Administration of Taxation, Supplementary Circular on Issues Relevant to the Application of Agreed Tax Rates to the Interest Income of Foreign Nationals and Individual Residents of Hong Kong, Macao and Taiwan Derived from Their Savings Deposits

Issued: August 7 2007
Effective: As of date of issuance

Applicability: The term "foreign nationals and individual residents of Hong Kong, Macao and Taiwan" means individuals who only pay individual income tax for income derived from China according to the second paragraph of Article 1 of the PRC Individual Income Tax Law and tax agreements (Article 2).

Main contents: In regard to the interest income of foreign nationals and individual residents of Hong Kong, Macao and Taiwan derived from their savings deposits in China, where the tax rate stipulated in the tax agreement signed between their home country (region) and China is lower than the tax rate stipulated in the laws and regulations of China, the foreign nationals and individual residents may enjoy the more favourable rate under the agreement. Where the tax rate in the tax treaty is higher than the tax rate stipulated in the laws and regulations of China, the latter tax rate shall be applied (Article 1).