US Green Card Holders Working in China Michael Sylvester

We are often questioned about green card holders working here in Mainland China for US firms and while there is a lot of misinformation floating about it, the rules are rather simple.  If you have a green card, then you are the same as a US citizen for purposes of US taxation.
 
From: IRS Publication 4588 on green card holders living abroad
 
"If you have a US green card, you are a lawful permanent resident of the US even if you live abroad.  This means you are treated as a US residnet for US income tax purposes and you are subject to US tax on your world income from whatever source derived.   Accordingly, you must file a US return unless (a)  there has been a final administrative or judicial determination that your lawful permanent resident status has been revoked or abandoned, (b) your gross income from world wide sources is less than the amounts that require a tax return to be filed or (c) your US residence status is affected by an income tax treaty."
 

Now, of course this becomes infinitely more complicated if the green card holder happens to carry a Chinese passport -- and for resolution of those issues, you have to also look at the "Income Tax Convention" between United States and the People's Republic of China.   
 
 
And a quick reading of that, after it makes your head spin and fly off your shoulders, will tell you that not only does a green card holder owe US IRS rates on all world wide income, but in a technical sense, you also owe 45% of all world wide income to China.  This means that if you are Chinese, carry a Chinese passport and a US green card, then you technically owe 45% of your world wide income to someone -- either China and/or the USA or both -- depending on where you live and earn income.
 
 
So, when dealing with this kind of issue, one of the best pieces of advice we can give is to swithc over to a US passport, should you wish to do so and you otherwise qualify.  Good luck and if you are dealing with this issues, you are not crazy -- it really is as complicated as you think it it.  
 
 
Sorry folks, we do not write these crazy pieces of law, we just tell you what they mean...