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In order to facilitate the administration on the taxation of the individual income, it has been decided to make the following amendments to the Detailed Rules and Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China: 1. Article 2, clause 1, "Any individual residing for one year or more in the People's Republic of China mentioned in Article 1 of the Tax Law refers to any individual who resided in China for a full 365 days of a tax year. No subtractions shall be made therein of the number of days of temporary absence from Chinese territory within the tax year." has been changed into "Any individual residing for one year or more in the People's Republic of China mentioned in article 1 of the Tax Law refers to any individual who resides in China for a full 365 days of a tax year." 2. Article 5, clause 1, Item 1, "But for individuals whose continuous residence in China does not exceed 90 days, the above remuneration paid by employers outside China may be exempted from taxation." has been changed into "But for individuals whose continuous or progressive residence during one calendar year does not exceed 90 days, the wages and salaries paid by employers outside China may be exempted from taxation." The expression "residence during one calendar year does not exceed 90 days" mentioned above in the second paragraph refers to residence in China from January 1st to December 31 does not exceed 90 days either by continuous calculation or by progressive calculation. That means, for individuals who leave China and enter China again in the meantime (including who leave China within the validity period of the visa), subtractions can be made therein of the number of absent days from Chinese territory. It is calculated that whether whose actual residence in China exceeds 90 days. For individuals whose continuous or progressive residence in China exceeds 90 days within one calendar year, individual income shall be levied on the income from wages and salaries during the period of their actual residence in China. The taxable income shall be calculated in accordance with the following formula: Taxable Income =(Income from wages and salaries in a month x Applicable tax rate - corresponding fixed deduction/Number of the days of the month) x Number of the actual residing days in the month The taxable income calculated in accordance with the above formula shall be allowed a 50% reduction. For foreigners who reside in China less than one month, whose income received from wages and salaries of the whole month and the taxable income calculated in accordance with the above formula shall be allowed a 50% reduction. |
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