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	NOTICE OF THE STATE ADMINISTRATION OF TAXATION ON STRENGTHENING THE ADMINISTRATION OF INDIVIDUAL INCOME TAX COLLECTION AFTER RAISING THE MINIMUM THRESHOLDS OF VALUE-ADDED TAX AND BUSINESS TAX

	(No. 80 [2003] Promulgated by the State Administration of Taxation on July 1, 2003)


SUBJECT : TAX COLLECTION; INDIVIDUAL INCOME TAX
ISSUING DEPARTMENT : STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 07/01/2003
IMPLEMENT DATE : 07/01/2003
LENGTH : 410 words
TEXT :

Recently we are inquired by the taxation organs in some regions on how to calculate and levy individual income tax on the taxpayers failing to reach the minimum thresholds of value-added tax and business tax raised by the "Notice of the Ministry of Finance and the State Administration of Taxation on the Relevant Taxation Policies Concerning Re-Employment of Laid-Off Workers and Unemployed People" (No. 208 [2002] of the MOF) and the "Supplementary Notice of the Ministry of Finance and the State Administration of Taxation on the Relevant Taxation Policies Concerning Re-Employment of Laid-Off Workers and Unemployed People" (No. 12 [2003] of the MOF). Upon research, we hereby give our notice as follows regarding the relevant issues:

I. In accordance with the "Individual Income Tax Law of the People's Republic of China" and the regulation for its implementation, a taxpayer shall pay individual income tax in accordance with the law for the income from his production and operation in individual business and also the income from contracted operation or leased operation of an enterprise or public institution. None of the taxpayers who fail to reach the minimum thresholds of value-added tax and business tax shall, unless otherwise prescribed in taxation policies, be exempted from individual income tax.

II. After the minimum thresholds of value-added tax and business tax have been raised, the taxpayers who adopt the method of paying taxes upon assessed income (including the taxpayers who pay individual income taxes at the comprehensive rate or a certain proportion of the payable circulation tax, etc.) may, in accordance with the relevant provisions of the "Law of the People's Republic of China on Administration of Tax Collection" and the "Individual Income Tax Law of the People's Republic of China", and in combination with the actual situation that the taxpayers' income will increase accordingly after the minimum thresholds of value-added tax and business tax are raised, re-assess the amount of their respective individual income tax in compliance with the principles of being scientific, reasonable and public.

III. The taxpayers who paid individual income taxes at a certain proportion of the payable circulation tax need no longer pay the value-added tax or business tax after the minimum thresholds of the value-added tax and business tax are raised. If they shall still pay the individual income tax, they shall change the original payment method, and re-determine the method of paying the individual income tax upon the assessed income, which is suitable for the new situation.