The 13th NPC Standing Committee concluded its fifth session on August 31st, 2018 and passed an amendment containing broad changes to the existing Individual Income Tax Law (IIT)《中华人民共和国个人所得税法》. The revised IIT law marks a significant milestone to PRC IIT system and will be partly implemented from this October and come fully into effect on January 1, 2019.
The amendment makes changes to 12 of the Law's 15 articles and adds 7 new articles, including:
- New Tax Residence Rules
- Tax Categories Consolidation
- Adjusted Tax Rates and Brackets
- Higher Minimum Thresholds
- Special Expense Deductions
- General Anti-Tax Avoidance Rules (GAAR)
The revised IIT law will bring significant challenges to the expatriates in China with global incomes and enterprises' human resources and financial departments who must cope with the change. From the expanded taxation scope of foreign individuals to the raising compliance risks of foreign enterprises, our member companies should be fully prepared for the upcoming changes.
The mission of AmCham China's Tax Forum is to increase transparency in dealing with tax issues with the Chinese government and to improve the US taxpayer's position on tax issues in China by pooling resources and information from chamber members and experts who follow developments in Chinese tax law and practice. The forum encourages the participation of members' officers, consultants, accountants, lawyers or others focused on or responsible for tax matters.