China, People's Republic of

The Amendment to China’s Individual Income Tax (IIT) Law was passed in August 2018, which signifies an overhaul of the IIT system. The key changes include:

• Revising the criteria for determining tax residency status.
• Implementing a mixture of aggregate and schedular taxation system to replace the previous schedular taxation system.
• Amending the tax rates and taxable income brackets.
• Increasing the standard basic deduction and introducing specific additional deductible items.
• Transforming the IIT collection and administration from a legal-person based system to a natural-person based system.
• Introducing anti-avoidance rules.