China’s New IIT Rules: A Guide for Employers – New Issue of China Briefing Magazine

March 4, 2019 Posted by China Briefing Written by Dezan Shira & Associates Reading Time: 2 minutes

The latest issue of China Briefing Magazine, titled “China’s New IIT Rules: A Guide for Employers“, is out now and currently available to subscribers as a complimentary download from the Asia Briefing Publication Store.

In this Issue:

What You Need to Know About the IIT Reform
The IIT Reform’s Impact on Expatriates
How to Calculate and Pay IIT for Your Employees
IIT Calculation Methods for Lump-sum Annual Bonuses

Last year, China introduced the biggest changes to its individual income tax (IIT) system since at least 2011 with the passing of a new IIT law.

The new law brought forward a host of changes to individual taxation in China, including by revising tax brackets, expanding deductibles, and altering residency rules for foreign workers.

In the process of introducing the new law, however, tax authorities caught many individuals and businesses off guard with the speed at which the changes were announced and implemented.

Need advice on individual income tax in China?

The new tax brackets took effect on October 1, 2018 – only a month after the law was finalized – while the rest of the provisions came into force on January 1, 2019.

Not only did the brief transitional window give taxpayers little time to adjust, many of the details of the law were not made clear until additional circulars and announcements were released much later. The quick and unclear roll-out left individuals and businesses scrambling to make sense of the changes.

To help foreign investors and taxpayers understand the ins and outs of the updates, this issue of China Briefing offers a comprehensive guide to China’s IIT reforms.

We begin by explaining the most important features of the new IIT law, including the new tax brackets, income categories, special deductions, and residency rules.

Next, we analyze the impact of the reforms on foreign expatriates, and then offer a guide outlining how to calculate and withhold IIT.

Finally, we look at how the new law affects taxation of annual bonuses.

We hope this magazine serves you well in making the most of the personal taxation benefits China offers and helps your business seamlessly transition to the new IIT regime.

About Us

China Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Dalian, Beijing, Shanghai, Guangzhou, Shenzhen, and Hong Kong. Readers may write china@dezshira.com for more support on doing business in China.