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Revised Individual Income Tax Law to Come into Force in January 2019

New mainland income tax law for residents and non-residents are to come into force as of 1 January 2019.

Among the major revisions are the following:

  • Any individual who has residence in China or who resides in China for 183 days or more in any one tax year will be deemed to be tax resident. Accordingly, in line with the requirements of the Individual Income Tax Law, they are liable to be duly taxed on their global income.
  • Any individual who has no residence in China or who resides in China for no more than 183 days in any one tax year, will be deemed to be non-resident. Accordingly, in line with the requirements of the Individual Income Tax Law, they are liable to be duly taxed solely on any income they receive with source from China.
  • Consolidated income comprising (1) income from wages and salaries, (2) income from personal services, (3) income earned as an author, and (4) income from royalties shall be subject to tax at a progressive rate (from 3% to 45%) within seven different bands.
  • Income derived from business operations shall be subject to progressive tax rates (from 5% to 35%) within five different bands.
  • The applicable tax rate for all income derived from interest / dividends / bonuses, lease of property, transfer of property and any contingent income shall be subject to tax at a rate of 20%.

These revisions to the Individual Income Tax Law were formally adopted on 31 August during the course of the Fifth Session of the 13th National People’s Congress (NPC) Standing Committee.

For further details (in Chinese), please visit the following link:

Decision of the NPC Standing Committee on Amending the Individual Income Tax Law of the PRC

Content provided by Picture: HKTDC Research
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