How to find a permanent establishment for the foreign headquarter?

Under most double tax treaties between China and other countries, a permanent establishment will be constituted if:

• The Chinese entity receives services from foreign entities, be the service rendered in China or overseas; and
• The duration of the provision of such services lasts longer than 183 days within any 12-month period in aggregation.

The 183-day rule is also applicable to individual income tax, where if the employee spends more than 183 days in China, then the China-sourced income, even if paid by the foreign employer, will subject to individual income tax regime.