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By Zhan Lisheng (China Daily)
Updated: 2007-10-31 07:46

Guangzhou - From Thursday, foreigners and overseas Chinese in the south China city of Guangzhou will have to declare their personal income for tax purposes.

According to a new regulation on income tax, all foreign workers will be asked to declare their earnings regardless of the length of time they have spent working in the city.

Overseas Chinese and people from Hong Kong, Macao and Taiwan will also be required to make declarations.

For those working for a local company, the responsibility to declare earnings will be with the employer. Those working on a self-employed or freelance basis will be required to make their own tax declarations.

Li Jing, an official with Guangzhou local taxation bureau, said foreign workers with local firms or social organizations should produce different documents to those required from freelance and self-employed workers, and people who derive income from a "one-off" event.

The rule will apply to all foreign workers, including teachers and researchers, she said.

"Those who fail to submit their income tax declarations on time will be fined between 2,000 yuan ($270) and 10,000 yuan. Those who attempt to falsify their returns will be fined up to 50,000 yuan," Li said.

She said the regulation seeks to better regulate the collection of income tax and stamp out tax evasion by foreign workers.

Authorities have established a computerized records system and since May, have been urging businesses to set up files for all their foreign workers to allow tax collectors easy access to detailed information on income tax payments, Li said.

Ma Shizhao, an analyst with the Guangdong provincial local taxation research society, said all foreigners who make their livings in Guangzhou should pay an appropriate amount of tax. Based on his own research, he said there are still serious problems associated with tax declarations.

In the Guangzhou Development District, for example, which is home to many foreign-funded firms, Ma said about 45 percent of foreign employees declared their monthly incomes as below 20,000 yuan.