10 Jan 2019
What are the implications of the recent revisions to China’s individual income tax regulations?
Under the terms of the amended Individual Income Tax Law, which has come into effect since 1 January 2019, “Consolidated Income” will be deemed to be (1) any income paid as a wage/salary, plus (2) any income derived from any payment for personal services, plus (3) any income earned as an author, plus (4) any income due from accrued royalties. The combined sum of the income from all such sources is then subject to individual income tax at the following rates:
Individual Income Tax Rates (Applicable to Consolidated Income)
|Tier||Annual Taxable Income (RMB)||Tax Rate|
|1||36,000 or less||3%|
|2||Amount in excess of 36,000 to a maximum of 144,000||10%|
|3||Amount in excess of 144,000 to a maximum of 300,000||20%|
|4||Amount in excess of 300,000 to a maximum of 420,000||25%|
|5||Amount in excess of 420,000 to a maximum of 660,000||30%|
|6||Amount in excess of 660,000 to a maximum of 960,000||35%|
|7||Amount in excess of 960,000||45%|
1. The annual taxable income referred to in the above table is deemed to be the consolidated income earned by a resident individual in a single tax year, less expenses of RMB60,000, special deductions, special additional deductions and any other deductions determined in accordance with the law.
2. The tax payable by non-resident individuals on wages/salaries, income derived from personal services, income earned as an author and accrued income from due royalties should be calculated each month in line with the above table after making any relevant conversions.
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