Search Results for: IIT

China tax alert: individual income tax deductions — catch yourself up with the new changes in play on IIT calculations

The revised Individual Income Tax Law of the People’s Republic of China stands to significantly affect workers’ monthly net salaries going forth in 2019. From 1 January, individuals monthly net salaries should have risen from their December salary, as the individual withholding tax calculation has been altered from a monthly taxable basis to annual accumulated income basis (although tax is still withheld on a monthly basis). What’s more, the type of deductions applied to calculate the monthly taxable income has […]

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Horizons Q & A: individual income tax (IIT) for foreign employees in China

It’s important for both China-based employers and foreign employees working in China to be familiar with income tax and compliance requirements pertaining to China’s Individual Income Tax (IIT) Law. Let’s jump in and answer some basic questions in three parts.

Part I – Individual income tax of foreign employees

Q: What is the Individual Income Tax Liabilities for Foreign Employees in China?

A: The IIT liability of a foreign individual in China depends on the individual’s duration of stay in China and their […]

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CHINA | Calculating Individual Income Tax

In China, individual income tax (‘IIT’) is calculated on an accumulated basis.

From August 32 2018, the revised Individual Income Tax Law reformed taxable income for tax residents to be measured on a consolidated basis from the 1 January to 31 December (tax year).

In other words, the tax rate applied in January should be lower than December, as it is start of the tax year. Whilst, tax rates may raise in December as the accumulated income may increase through the […]

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