A number of tax regulations in China have been updated due to changes in government policy. To help you understand what these updates are and how they will affect your organisation, we have prepared a table summarising them.
Circular Number |
Issuance Date |
Effective Date |
Topic |
What is new? |
SAT Announcement [2011] No.24 |
2011-3-28 |
2011-4-1 |
Clarifications on various tax issues related to non-tax-resident-enterprises |
This Regulation covers various income tax issues of a non-tax-resident-enterprise ("non-TRE"):
|
Individual Income Tax ("IIT") Law Amendment (Draft) |
2011-4-25 |
n.a. |
The Draft Amendment is open for public opinions till 2011-5-25 |
The current Draft contains the following major amendments:
Based on the above, low and medium income tax payers will pay less tax while high income tax payers with a monthly income of above approx. RMB 20000 will have to pay more tax. However, the changes in the tax burden are overall not significant. The highest IIT rate of 45% is not changed. The overall IIT system remains simple but relatively simple without considering family status or different levels of living costs all over China, etc. |
SAT Announcement [2011] No.24 |
2011-4-28 |
2011-5-1 |
Calculation of IIT for an annual bonus if part of the tax for the annual bonus is borne by the employer |
This Regulation clarifies how IIT shall be calculated for an annual bonus if part of such tax is borne by the employer, i.e. net arrangements. |
Circular Guoshuifa [2011] 50 |
2011-4-15 |
2011-4-25 |
The SAT urges local tax authorities to strengthen IIT collection |
This Circular was issued by the SAT to local tax authorities to urge the latter to strengthen IIT collection. Among other things, emphasis has been made to strengthen the IIT administration on expatriates working for permanent establishments in China. Local tax authorities are encouraged to set up and keep records for expatriates working in China for tax administration purposes. |
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 18/05/2011.