D3203 Income Tax Of China, UK And New Zealand

Running head: Income tax of China, UK and New Zealand 1

Income tax of China, UK and New Zealand

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Income tax of China, UK and New Zealand

Chinese income tax comes from different sources such as rental income, royalties,

employment income, incidental income, author's remuneration and many others. The job

occupation of an individual dictates his or her tax rate. You are domiciled in China if you reside

in the mainland. If you are a citizen but live in other regions such as Taiwan, Macau or Hong

Kong, the Chinese government classifies you as a Chinese resident. If you like outside China and

you are a citizen, the government assumes that you still have strong ties with the country.

China deals with individuals differently when taxing those who work for foreign and local

investors. If you live in China in about 90 days, the government will not tax you in any way. But

if you get income from the country, the government will impose on the royalty.

The Chinese government has a modernized tax system which means that tax increases

as your income increase. The government taxes people differently that is, those who own their

business and those employed are taxed differently. The tax system has several deductions,

credits and exemptions depending on the status of an individual. If a person wants an

allowance, he or she has to include it in his or her tax declaration. Chinese authorities also give

tax penalties for those who fail to pay their tax. People eligible to pay tax in China have to

spend on a monthly basis and the employer may deduct the fee from personal salary. A

foreigner has to transfer money to a Chinese bank to cover the tax bills if the holder has a

different currency or cash in a foreign bank (Egger, 2015).

In the UK the system of taxation has some similarities and differences with that in China.

If a person is domiciled or resides in the UK, the government taxes him or her from the capital

Income tax of China, UK and New Zealand

gains and income which is similar to the Chinese system. Just like China if a person comes from

a foreign country United Kingdom will tax him or her from the income earned within the state.

The government also considers those citizens who live outside the country during taxation. If a

citizen who has business outsides the nation remits his or her property in the UK, the

government can tax the individual but cannot impose the business. The UK also has allowances

and deductions just like China which are deducted from the total tax (Schenk, 2015).

The UK gives allowance for dividends which China does not have. Unlike in China, UK

gives domiciled individuals an option when paying tax. These individuals can choose to pay their

tax on capital gains, investment income, and particular offshore salaries but they have to remit

the money to the UK government. The country gives other annual exception such as tax-free

allowance then capital gains. UK government provides some relief to business investments

from foreigners which is not present in the Chinese taxation system. The relief promotes

business among individuals in the country by creating a healthy environment for investment. It

facilitates the trade through securities, loans, and shares and their law allows such activities.

The United Kingdom government also taxes children, but China does not have such a thing in

their system. Children are taxed in the UK unless they derive their income from parents or gifts

where the government imposes the parent.

New Zealand receives its income from different sources and its residents. Just like China

and UK, New Zealand taxes its residents from all their worldwide income. Worldwide income

incorporates all payments even from foreign countries. For instance, rental income, foreign

Income tax of China, UK and New Zealand

pensions, and interest from offshore banks. Like the other two countries discussed in this

paper, New Zealand also taxes foreigners who have invested in the country. The income from

non-residents includes pension from the state, dividends from companies and employment in a

company located in New Zealand. New Zealand has double tax contracts with other nations just

like in China, but the UK does not have such an agreement as explained in this paper. New

Zealand also has tax exceptions, but they mostly apply to tax residents within the country

(Morelli, 2015).

Foreigners who visit New Zealand for a short period do not pay tax like in China unless

you are working in the country. If you work for a non-resident during the 90 days in the

country, your salary may not be taxed by the government. The government deducts your tax

from the monthly salary so that individuals do not have to pay on their own. In New Zealand,

you can pay your levy in installments which is not the same case in China and United Kingdom.

New Zealand has an outstanding taxation system because not every citizen file their tax returns

even if employed. The government collects tax depending on whether you are a citizen,

foreigner or personal occupation. New Zealand, China, and the UK have differences and

similarities in their taxation as discussed in this paper. The paper has relevant information

which can help in creating a better understanding of the income and tax systems in different

countries.

Income tax of China, UK and New Zealand

References

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Income tax of China, UK and New Zealand

Morelli, S., Smeeding, T., & Thompson, J. (2015). Post-1970 trends in within-country inequality

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