China extends foreign employee tax breaks to 2027 to attract global talent.

On Tuesday,Indirect arbitrage China's Ministry of Finance announced that the tax incentive policy for foreign nationals working in China will be extended to the end of 2027. This is good news for businesses looking to attract global talent during periods of economic downturn.

Previously, the Chinese government's initial plan was to cancel the tax-free allowance for foreign employees in 2022. However, influenced by some review results, the tax-free allowance for foreign employees was extended to the end of this year.

Recently, foreign chambers of commerce and business organizations in China have been seeking confirmation on whether the Chinese government will further expand the tax incentives for foreign nationals. This policy allows foreigners to enjoy deductions on expenses such as housing rent, children's education, language training, and other costs.

Kiran Patel, a senior director at the British Chamber of Commerce in China, stated that extending the tax incentives for foreign nationals will help further curb the loss of international talent, while providing clear guidance for multinational companies on the deployment of expatriate employees and payroll structures.

The announcement of the extension of the tax incentive policy for foreign nationals is a real commitment by the Chinese government to multinational companies in China. However, global companies remain indifferent to the new incentives, indicating that these measures cannot offset the risks brought by economic weakness and the slump in real estate.

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