How much do you know about Individual Income Tax Law of China

How much do you know about Individual Income Tax Law of China

Abstract On Aug 31, 2018, the Standing Committee of the National People’s Congress passed the amendment to reform individual income tax law (“the Amendment”).The Amendment has come into effect from Jan 1, 2019.

Here are the things you need to know about Amendment:

1

Tax identities

Resident taxpayers

An individual domiciled in China or who is not domiciled in China but has stayed in the aggregate for 183 days or more of a tax year in China.

Non-resident taxpayers

An individual who neither is domiciled in China nor stays in China or who is not domiciled in China but has stayed in the aggregate for less than 183 days of a tax year in China.

2

Comprehensive Income

1、Wages and salaries

2、Remuneration for labor services

3、Author’s remuneration

4、Royalties

3

Standard deduction

The personal deduction on comprehensive income is raised from RMB 3,500 to RMB 5,000 per month

4

 Additionla deduction items for resident taxpayers

1、Caring for the elderly

2、Education expenses for Children

3、Expenses for further self-education

4、Medical expenses for serious illness

5、Housing loan interest / Housing rent

Individual income tax rates 

(applicable to resident taxpayers)

Individual income tax rates 

(applicable to non-resident taxpayers)

 

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