The Chinese regime has intensified scrutiny on Chinese citizens’ overseas income and assets amid a shortfall in revenue due to the sluggish economy.
The regime’s expanded taxation indicates that the institutional advantages of globalization no longer exist, and Chinese employees overseas will now face tough choices, according to analysts.
According to social media posts in recent days, Chinese companies such as ByteDance, the Chinese parent company of TikTok, have sent messages to their employees, including former employees, who have worked in other countries, asking them to report their overseas income to Chinese tax authorities as the tax season approaches in mainland China.
Many Chinese citizens working in TikTok’s U.S. offices received such notices. After paying federal and state taxes in the United States, they were required to pay additional taxes in China for the same income, and tax rates reached as high as 45 percent, according to social media posts. ByteDance also required its Chinese employees at its Singapore headquarters to pay taxes in China.
Some large companies, such as Tencent, have also required their Chinese employees to file taxes in China. If the overseas tax amount is lower than the tax payable in China, then, according to Chinese tax law, the difference must be paid; if it is higher, it will not be refunded.
Chinese state media reported in January that China’s State Taxation Administration strengthened residents’ overseas income taxation and had been reminding taxpayers to self-report overseas income earned between 2022 and 2024 and to make tax payments for it.
Based on the Chinese regime’s increased enforcement of taxation, Chinese citizens expressed concerns on social media that all companies with operations in China, including Nvidia and Apple, may be required to file taxes for their employees who have Chinese passports even though they work in other countries.
The deadline for filing individual income taxes in mainland China for the 2025 tax year is June 30, 2026. If Chinese employees fail to file taxes for their overseas income and assets by that date, they will face late payment penalties, according to the Chinese regime’s tax regulations.
In 2025, ByteDance and Tencent sent reminders for filing taxes in mainland China to their Chinese employees overseas. This year, more employees received the message, as the Chinese regime has increased scrutiny on overseas income.
“Resident individuals” in China are required to pay individual income taxes on income earned both within and outside China, according to the Chinese regime’s Individual Income Tax Law, which took effect in 2019. China defines resident individuals as “those who have a domicile in China or stay in the country for 183 days or more within a tax year.”
Since the 1980s, the Chinese Communist Party (CCP) has had a global taxation policy in place, but has only strengthened enforcement in recent years.
China joined the Common Reporting Standard, an international agreement on sharing tax information, in 2018. Under the reporting standard’s rules, account information of Chinese tax resident individuals or of those acting as the controlling shareholders of non-financial entities in overseas financial institutions will be exchanged with Chinese tax authorities.
The new Individual Income Tax Law added anti-tax-avoidance provisions.
Davy J. Wong, a U.S.-based economist, told The Epoch Times that China’s increasing enforcement of taxation on overseas income is “a result of the reactivation of legal tools, fiscal pressure, and the maturity of technological conditions, rather than a single cause.”
“Prior to 2018, enforcement was not strict because capital outflows were not severe, overseas personal income was not particularly high, but enforcement costs were relatively high. In recent years, the widening of fiscal deficit has forced stricter enforcement,” he said of the change. “It should be said that before, there was neither the ability nor the need; now there is ... the ability, the motivation, and the necessity to collect taxes on overseas income.”
Wu Shaoping, a Chinese lawyer residing in the United States, told The Epoch Times that China’s various economic data continue to worsen and that the revenue levels of most local governments are dire.
Options for Chinese People Working Overseas
In the era of globalization, the institutional differences between the United States and China have attracted many people to move between the two countries, and now overseas Chinese employees are forced to make a choice, Wong pointed out.“Simply put, the method of obtaining high salaries and avoiding taxes by moving overseas is no longer feasible,” Wong said.
He stated that China’s taxes are higher than U.S. federal taxes, which has a significant effect on middle- and high-income professionals in the technology sector.
“Chinese employees overseas have three options: first, full compliance by declaring global income; second, operating in a gray area; and third, potential identity restructuring, such as acquiring other nationalities or purchasing passports from other countries,” he said.
“In an era of increasing global tax transparency, identity and assets must remain consistent in the long run. If their jobs and assets are permanently located overseas, they may feel that the tax costs are higher than the cost of changing their nationality, so they will choose to change,” Wong said.
“Changing nationality is no longer just about political rights; it also encompasses economic and tax rights.”
