Good News︱Individual Income Tax Reduction Policy Announced!

Good News︱Individual Income Tax Reduction Policy Announced!

Major news in 2019!


Announcement of Tax Reduction Policies and 6 Special Deductions

The revised regulations for the implementation of the Personal Income Tax Law will be implemented simultaneously with the new Personal Income Tax Law from January 1, 2019.


In this new tax policy, besides raising the starting point to 5000 RMB


Most concerned about children's education, continuing education, serious illness medical treatment


Special additional deduction of personal income tax including interest on housing loans or six items of housing rent and support for the elderly


Among them, foreigners can enjoy this policy only if they have lived in China for 183 days.


A new special tax policy can be enjoyed if a single departure does not exceed 30 days.


On the Policy of Allowances and Subsidies for Foreign Individuals

During the period from January 1, 2019 to December 31, 2021, foreign individuals who meet the personal conditions of residents may choose to enjoy the special additional deduction of personal income tax.




You may also choose to follow the Circular of the State Administration of Taxation of the Ministry of Finance on Some Policy Issues of Individual Income Tax (Fiscal and Taxation No. 20, 1994).

也可以选择按照《财政部 国家税务总局关于个人所得税若干政策问题的通知》(财税〔1994〕20号)

Notice of the State Administration of Taxation on the Execution of Individual Income Tax on Subsidies Obtained by Foreign Individuals (State Tax Issue [1997] 54)


Notice of the State Administration of Taxation of the Ministry of Finance on the Collection and Exemption of Individual Income Tax by Foreign Individuals from Subsidies such as Housing in Hong Kong and Macao (Fiscal and Tax [2004] 29)

《财政部 国家税务总局关于外籍个人取得港澳地区住房等补贴征免个人所得税的通知》(财税〔2004〕29号)规定

They shall enjoy preferential tax-free policies such as housing allowances, language training fees and children's education fees, but they shall not be enjoyed at the same time.


Once a foreign individual has chosen to do so, he may not change it within a tax year.


Tip: Since January 1, 2002, foreign individuals no longer enjoy preferential policies of housing allowance, language training allowance and children's education allowance. They should enjoy special additional deduction according to regulations.


1、Children's Education


Taxpayer's children receive full-time education (pre-school education and Diploma education) related expenditures, according to the standard quota of 1000 yuan per child per month.


Parents can choose to deduct 100% of the deduction standard by one of them or 50% of the deduction standard by both sides. The specific deduction method can not be changed in a tax year.


2、Continuing Education


Taxpayers'expenditure on continuing education in China shall be deducted in accordance with the quota of 400 RMB per month for continuing education with academic qualifications (degrees) and 3600 RMB for continuing education with professional qualifications of skilled or technical personnel in the current year.


Continuing vocational education for skilled or professional technicians shall be deducted by the taxpayer himself who receives the education. 

Continuing education with bachelor's degree or above shall be deducted by the taxpayer who receives the education himself; continuing education with bachelor's degree or below may be deducted by the taxpayer who receives the education himself or by his parents according to the education of his children.


3、Interest on housing loans


Oneself or oneself spouse, either alone or jointly, use commercial banks or housing provident fund personal housing loans to purchase housing in China for myself or my spouse

And the interest expenditure on the first set of housing loans incurred shall be deducted according to the standard quota of 1000 yuan per month.


By agreement between husband and wife, one of them may choose to deduct it. After the selection is confirmed, it can not be changed in a tax year.

The first housing loan that the couple purchased separately before marriage, the interest expenditure of the loan, after marriage, they can choose one of the houses they purchased

Which can be deducted by 100% of the deduction standard by the purchaser or 50% of the deduction standard by the couple respectively. The specific deduction method can not be changed in a tax year.


4、Housing rent


Taxpayers themselves and their spouses who incur rental expenditure for housing without their own housing in major working cities may deduct it in accordance with the following standard quotas

Municipalities directly under the Central Government, provincial capitals (capital) cities, cities with separate plans, and other cities determined by the State Council 1500 yuan per month; in addition to the cities mentioned above

Cities with a registered population of more than 1 million people in municipal districts have 1,100 yuan per month and registered residents in municipal districts have 1,000 yuan per month. 

Cities with a population of no more than 1 million people (including) pay 800 yuan a month.


Housing rental expenditure shall be deducted by the lessee who has signed the rental housing contract. If the main working cities of both spouses are the same, and both spouses have no housing in the locality and rent their houses separately

They can only choose one side to deduct; if the main working cities of both spouses are different, and both spouses have no housing in both places and rent their houses separately, they can deduct according to the stipulated standards.


5、Supporting the Old


Taxpayers'support expenditure for a parent aged 60 or above can be deducted according to the standard quota of 2,000 yuan per month for the only child and 2,000 yuan for the non-only child (the amount per person can not exceed 1,000 yuan).

Specific allocation methods include equalization, agreed allocation and appointed allocation by the elderly; written allocation agreements should be signed for the appointed allocation, which takes precedence over the agreed allocation; specific allocation methods and quotas can not be changed within a tax year after they are determined.


The deduction subject of special additional deduction for supporting the elderly is the maintenance obligor

Including the children of the dependent (children born in wedlock, children born out of wedlock, stepchildren, adoptive children) and grandparents whose children have passed away, grandparents'grandchildren and grandchildren.


6、Medical treatment of serious diseases


In a tax year, the medical expenses related to basic medical insurance incurred by the taxpayer, after deducting the personal burden 

(referring to the self-paid part within the scope of the medical insurance catalogue) accumulated over 15,000 yuan, shall be deducted by the taxpayer according to the facts within the limit of 80,000 yuan when handling the annual settlement and settlement.


The medical expenses incurred by taxpayers may be deducted by themselves or their spouses; the medical expenses incurred by minor children may be deducted by one of their parents.



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