China, People's Republic of

Individual - Significant developments

Last reviewed - 30 December 2019

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.