When living and working in China you might encounter various challenges, not least of which challenges concerning aspects of taxation. Many expats find themselves taxable on the same income in China as well as in their own country. Taking the point of view of an Italian citizen working in China, this will lead to the necessity of asking for the reimbursement of taxes paid to the Italian tax bureau.

In this article we describe how to get prepared in order to ask for the reimbursement in Italy for the taxes paid in both countries, but are actually only due in China.

When is it possible to ask for the reimbursement of the taxes in Italy?

The situations in which foreign workers must pay taxes in both China and Italy are quite few, and it usually only happens when a foreign worker has tax residency in China, but the labor contract has been stipulated with a company in Italy.

Only in this scenario will both countries require tax payment, causing a double monetary outflow for the foreign worker, who is then forced to ask for the reimbursement of the taxes paid.

In other situations, for example, when the foreign worker has fiscal residency in Italy, the income has been sourced from China and the employer is a company registered in China, the foreign worker shall only declare his/her income in Italy, also specifying his/her Chinese income and the taxes paid in China, that will be then be deducted from the taxes due in Italy (this will not cause a double cash outflow for the foreign worker).

How to apply for reimbursement and which documents to prepare?

In the above mentioned situation, it is necessary to prepare certain documents in order to apply for the reimbursement of the taxes paid in Italy, which must be sent to the Italian tax bureau “Agenzia delle Entrate”, at their branch in Pescara (Centro Operativo di Pescara). These documents are:

• A form to request the tax reimbursement, which can be      found on the website of the Italian tax bureau through the following link;

• Certificate of Chinese fiscal residency issued by the Chinese      authorities. The Italian tax bureau, within the form mentioned in our      previous step, leaves a space especially for this purpose. The Chinese      authorities usually issue a different document to prove your fiscal      residency, which is also accepted by the Italian tax bureau.

• A certificate proving the payment of taxes in China,      issued by the Chinese tax bureau.

The application for the reimbursement must be presented within 48 months from the date of the payment of the taxes.

For further information or fiscal assistance, do not hesitate to contact us at our e-mail address info@phcadvisory.com.