If a Chinese residence has already paid IIT outside China, should he/she pay IIT in China?

That depends on how much he/she has paid overseas. The individual income tax on overseas income should be calculated separately for each different country or region and for each different income category according to Chinese law. If the amount paid overseas is less than the amount that should be paid in China, the difference should be […]

How is yearly bonus taxed?

IIT payable for bonus = Bonus * Applicable rate – Quick deduction Tax rate and quick deduction should apply to those of an amount equal to bonus divided by 12.

How is severance payment taxed?

The part not more than three times of the local average salary in the previous year will be exempted from IIT. The exceeding portion shall be taxed as salary and wages.

What is the penalty and fine for overdue tax?

Late interest penalty shall be 0.05% per day for overdue IIT. Apart from late interest penalty, there shall be another once-off fine at 50% to 300% or 500% of the overdue IIT.

Under what circumstances can IIT be exempted?

a) Monetary awards granted by provincial governments, ministries and commissions under the State Council, units of the People’s Liberation Army at army level or above, or by foreign or international organizations for achievement in science, education, technology, culture, public health, sport or environmental protection, etc; b) Interest earned on state treasury bonds or other financial instruments […]

How to calculate IIT on salaries and wages?

Individual income tax on salaries and wages is computed at progressive rates ranging from 3% to 45% as follows. An allowance of RMB 3,500 and RMB 4,800 per month are deducted from salaries and wages to arrive taxable income for local employees and foreigners, respectively. No. Taxable income Tax Rate Quick calculation deduction   1 […]

What are the taxable items?

a) Income derived from services rendered within China pursuant to the holding of an office, employment, or the performance of a contract; b) Income derived from leasing properties in China; c) Income derived from the transfer of real properties, such as land use rights, buildings in China, or assignment of other properties within China; d) Income derived from granting licensing rights for use […]