Amendment to the Individual Income Tax Law Approved and New Taxation Threshold to Take Effect from October 1
Thu Nov 01 14:12:00 CST 2018 Published by:Editor

The Decision on Amending the Law of the People's Republic of China on Individual Income Tax (the "Decision") has recently been adopted at the Fifth Session of the Standing Committee of the 13th National People's Congress and will be implemented as of January 1st, 2019.

The Decision explicitly states that, with respect to the comprehensive income obtained by a resident individual, including the wage and salary income, labor remuneration, author's remuneration, and royalties, the taxable income shall be the balance of the gross income received in a tax year minus the CNY60,000 quota, special deductions, special additional deductions, and other deductions specified under the law. In addition, the Decision notes that for labor remuneration, author's remuneration and royalties, the taxable income shall be the balance of the amount received minus 20% thereof as the cost, and that for the author's remuneration, the taxable income in essence shall be reduced to 70 percent of the said balance. According to the Decision, during the period between October 1st, 2018 and December 31st, 2018, for the wage and salary income received by a taxpayer, the taxable income shall be the remainder after deducting the CNY5,000 quota, special deductions, and other deductions under the law, from the monthly income.

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