According to a notice issued by SAT on April 28th 2011, for employees’ annual one-off bonuses, individual income tax partially borne by employees is regarded as employee’s income and shall be included in employee’s income to pay individual income tax.
Lee & Lee Associates Comments: Employee shall pay individual income tax for the individual income tax that is borne by employer has been regulated before and what the notice above clarifies is the detail method of calculating the individual income tax under such circumstances.
Relevant Rule: “Notice of the State Administration of Taxation on the method of calculating employer’s contribution to individual income taxes on annual one-off bonuses obtained”, announcement No.28 2011 of SAT.
