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China Expat Tax Reprieve Gives Companies Room to Reassess Pay

Jan. 20, 2022, 12:00 AM

Many companies are holding off on decisions about new compensation plans for foreign employees, after China’s last-minute delay to a sweeping employment tax change.

Some companies had already cut the number of foreigners they employed in anticipation of the government’s planned Jan. 1 rollback, which would’ve seen benefits commonly offered to expats—like healthcare and childcare—become taxable.

“A number of companies did reduce their foreign national headcounts in 2021, by re-assignment or by not renewing contracts, in expectation of the individual income tax treatment not being extended,” Magnus Sprenger, chair of the Finance and Taxation Working Group for the European Union ...

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