Review of the Amendment to the Korea-China Tax Treaty Signed in 1983
[Asia Economy Intern Reporter Kim Nayeon] The Sankei Shimbun reported that the Japanese government is considering revising the "China-Japan Tax Treaty" to abolish the tax exemption on part-time job wages applied to Chinese international students.
According to the Sankei Shimbun on the 26th, under the treaty concluded in 1983, Chinese international students residing in Japan for education purposes receive tax exemption benefits on wages earned for living expenses and education.
When a company employing Chinese international students reports to the authorities, the wages earned to cover living and tuition expenses are not subject to withholding tax, thus receiving tax exemption benefits.
The Sankei cited multiple government officials stating that although this measure was introduced to promote student exchange, the treaty revision is being considered to align with recent international standards that tax is imposed by the country of residence.
This tax exemption measure is currently equally applied to Japanese international students residing in China.
However, due to difficulties Japanese international students face in obtaining work permits in China, it is expected that the number of Chinese international students working in Japan receiving tax exemptions overwhelmingly exceeds that of Japanese students working in China.
As a result, a ruling Liberal Democratic Party member pointed out the "imbalance" at a recent Japanese House of Councillors Budget Committee meeting.
With the international standard now being to tax part-time job wages of international students in their country of residence, the Japanese government has revised tax treaties with the United States, Singapore, Malaysia, and others to remove tax exemption provisions.
Besides China, tax treaties with South Korea, the Philippines, Indonesia, and others still retain tax exemption provisions related to international students' part-time job wages.
A Japanese government official stated, "We cannot comment on the contact situation with individual countries," but added, "We will actively work on revising existing treaties in cooperation with related ministries."
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