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U.S. & China Tax Treaty on Income from Real Estate

The U.S. has a tax treaty in place with China.  This treaty governs many issues, including the taxation of income from real estate holdings.  It is addressed specifically in Article 6 of the treaty.  The information below is an excerpt of Article 6.

UNITED STATES-THE PEOPLE’S REPUBLIC OF CHINA INCOME TAX CONVENTION
Agreement And Related Protocol Signed at Beijing on April 30, 1984;
Second Protocol Signed at Beijing on May 10, 1986;
Ratification Advised by The Senate of The United States of America on July 24, 1986;
Instruments of Ratification Exchanged on October 22,1986;
Entered into Force on January 1, 1987.
GENERAL EFFECTIVE DATE UNDER ARTICLE 27: 1 JANUARY 1987

ARTICLE 6

1. Income derived by a resident of a Contracting State from real property situated in the other Contracting State
may be taxed in that other Contracting State.

2. The term “real property” shall have the meaning which it has under the laws of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to real property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of real property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as real property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting or use in any other
form of real property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from real property of an enterprise and to
income from real property used for the performance of independent personal services.

 

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