Recent updates to China’s Individual Income Tax provide further clarification regarding IIT exemptions on foreign-sourced income and the Tax Residence rule. These updates also provide further guidance for calculating IIT for individuals not domiciled in China.
China’s VAT reform continued with new Value Added Tax policies, such as lowering of China’s VAT rates in 2019, increased scope of VAT credits and the introduction of a VAT refund pilot scheme from April 1st of 2019.
On March 5th, 2019, China announced reductions to the Value Added Tax (VAT). The VAT rates of 16% and 10% will be decreased to VAT rates of 13% and 9%. In the announcement, no specific date on which the new VAT reductions will come into effect was provided, but it could be expected to still come into effect in 2019.
China’s State Council introduced tax cuts for SMEs and low-profit enterprises. Among others, Corporate Income Tax (CIT) and Value Added Tax were cut for SMEs.
The new deferral policy for dividends tax (WHT) in China extended the scope of industries in which you can re-invest profits made by your company in China. According to the new legislation, dividends which are used to re-invest back into China can either enjoy a 0% or 5% preferential withholding tax rate.
China released another update to the country’s IIT Law. The new Individual Income Tax (IIT) Law outlines procedures to claim itemized deductions, introduces a new IIT withholding method and finalizes its reform to expatriate allowances.
After China released the Draft Amendments to the Individual Income Tax Law, several questions remained. This article answers these by explaining all aspects of the recently released Implementation Regulations for China’s IIT Law.
The amendments to the PRC IIT Law will introduce a number of potential important changes for individuals and their employers in China.
China has as of Dec 1st 2017 reduced its import duty rates for a wide array of consumer products as part of its trade liberalization.
What does “Tax break” stand for? What does the Individual Income Tax Law (IITL) state in China? What are the underlying rules and practices? The “Tax Break” is not an official rule in the Chinese tax authority. It is a common practice based on the understanding of the Individual Income Tax Law (IITL), the Individual Income Tax Implementing Rules (IITIR) and the Caishuizi (1995) issued by the Ministry of Finance (MOF) and the State Administration of Taxation (SAT).
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