Circular on Seeking Public Comments on the Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (Revised Draft for Comment)
Circular on Seeking Public Comments on the Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (Revised Draft for Comment)
Circular on Seeking Public Comments on the Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (Revised Draft for Comment)
October 20, 2018
In order to implement the new Individual Income Tax Law approved by the Standing Committee of the National People's Congress on August 31, we have drafted the Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (Revised Draft for Comment) for which public comments are hereby sought. The public may send their opinions through the following channels and in the following ways before November 4, 2018:
1. Give your opinions through the Information Management System for Solicitation of Comments for Financial Regulations (http://lisms.mof.gov.cn/lisms/action/loginAction.do?loginCookie=loginCookie) on the homepage of the website of the Ministry of Finance of the People's Republic of China (http://www.mof.gov.cn).
2. Send your opinion by mail to: Legal Affairs Department of the Ministry of Finance at No.3 Nansanxiang, Sanlihe, Xicheng District, Beijing, 100820, and mark the wording "comments sought on the implementing regulations of the individual income tax law" on the envelope.
Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (Revised Draft for Comment)
Article 1 The Regulations are formulated in accordance with the Individual Income Tax Law of the People's Republic of China (the "Individual Income Tax Law").
Article 2 For the purposes of Article 1 of the Individual Income Tax Law, "having a domicile within the territory of China" means habitually residing in the territory of China by reason of permanent residence, family or economic interests; "income sourced within and outside the territory of China" means income sourced within the territory of China and income sourced outside the territory of China.
The period of time of residing in the territory of China shall be calculated based on the period of time of staying in the territory of China.
Article 3 Unless otherwise stipulated by the competent departments for finance and tax under the State Council, the following types of income shall be deemed to be income sourced within the territory of China, whether or not the place of payment is within the territory of China:
1. income for personal services provided within the territory of China through the holding of any office, employment, the performance of a contract, etc.;
2. income related to operating activities derived from operating activities carried out within the territory of China;
3. income derived from the leasing of property to a lessee for use within the territory of China;
4. income derived from the licensing for use within the territory of China of any kind of licensing rights;
5. income derived from the transfer of immovable property and land use rights within the territory of China; income derived from the transfer of equity assets formed from investment in enterprises, institutions and other economic organizations within the territory of China; and income derived from the transfer of movable property and other property within the territory of China;
6. income from author's remuneration and casual income paid or borne by enterprises, institutions, other economic organizations and residential individuals within the territory of China; and
7. interest, dividend and bonus income derived from any enterprise, public institution, or other economic organization or individual resident within the territory of China.
Article 4 For income derived outside the territory of China by any resident individual who has no domicile in China but has resided in China for not more than five consecutive years in each of which he resided for 183 days or more accumulatively, or but has resided in China for more than five consecutive years in each of which he resided for 183 days or more accumulatively but during which he left China for more than 30 days on a single trip, subject to record-filing with the competent tax authority, individual income tax may be paid only on that part of his income that is derived from enterprises, institutions and other economic organizations or resident individuals within the territory of China; any taxpayer who has resided in China for more than five consecutive years in each of which he resided for 183 days or more accumulatively and during which he did not leave China for more than 30 days on a single trip, shall, commencing from the sixth year, pay individual income tax on all the income derived outside the territory of China.
Article 5 For any individual who has no domicile within the territory of China, but who has resided in the territory of China for a consecutive or aggregate period of no more than 90 days in a tax year, that part of his income that is sourced within the territory of China but is paid by an employer outside the territory of China, and which is not borne by any organization or office of the relevant employer located in the territory of China, shall be exempt from individual income tax.
Article 6 The scope of the income categories described in Article 2 of the Individual Income Tax Law shall be as follows:
1. "Wage and salary income" means wages, salaries, bonuses, year-end bonuses, profit shares, subsidies, allowances earned by individuals by virtue of the holding of any office or employment and other income earned by individuals relating to the holding of any office or employment;
2. "Income from remuneration for personal services" means income derived by individuals from engaging in design, decoration, installation, drafting, laboratory testing, other testing, medical treatment, legal, accounting, advisory, lecturing, news, broadcasting, translation, proofreading, painting and calligraphic, carving, film and television, sound recording, video recording, shows and concerts, performance, advertising, exhibition and technical services, introduction services, brokerage services, agency services and other personal services.
3. "Income from author's remuneration" means income derived by individuals by virtue of the publication of their works in books, newspapers and periodicals.
4. "Royalty income" means income derived by individuals from granting the right to use patents, trademarks, copyrights, non-patented technology and other licensing rights. Income derived from granting the right to use copyrights shall not include income from author's remuneration.
5. Business income means:
(1) income derived by individuals from engagement in the production and operating activities through individual businesses, sole proprietorship enterprises, and partnerships registered in China;
(2) income derived by individuals from engaging in the provision of educational, medical, advisory and other service activities for consideration, after having obtained the required licenses;
(3) income derived by individuals from contracting, renting, subcontracting or subletting;
(4) income derived by individuals from engagement in other production and operating activities.
6. "Interest, dividend and bonus income" means income from interest, dividends and bonuses derived by individuals by virtue of their ownership of creditors' rights and share rights;
7.
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October 20, 2018
In order to implement the new Individual Income Tax Law approved by the Standing Committee of the National People's Congress on August 31, we have drafted the Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (Revised Draft for Comment) for which public comments are hereby sought. The public may send their opinions through the following channels and in the following ways before November 4, 2018:
1. Give your opinions through the Information Management System for Solicitation of Comments for Financial Regulations (http://lisms.mof.gov.cn/lisms/action/loginAction.do?loginCookie=loginCookie) on the homepage of the website of the Ministry of Finance of the People's Republic of China (http://www.mof.gov.cn).
2. Send your opinion by mail to: Legal Affairs Department of the Ministry of Finance at No.3 Nansanxiang, Sanlihe, Xicheng District, Beijing, 100820, and mark the wording "comments sought on the implementing regulations of the individual income tax law" on the envelope.
Implementing Regulations of the Individual Income Tax Law of the People's Republic of China (Revised Draft for Comment)
Article 1 The Regulations are formulated in accordance with the Individual Income Tax Law of the People's Republic of China (the "Individual Income Tax Law").
Article 2 For the purposes of Article 1 of the Individual Income Tax Law, "having a domicile within the territory of China" means habitually residing in the territory of China by reason of permanent residence, family or economic interests; "income sourced within and outside the territory of China" means income sourced within the territory of China and income sourced outside the territory of China.
The period of time of residing in the territory of China shall be calculated based on the period of time of staying in the territory of China.
Article 3 Unless otherwise stipulated by the competent departments for finance and tax under the State Council, the following types of income shall be deemed to be income sourced within the territory of China, whether or not the place of payment is within the territory of China:
1. income for personal services provided within the territory of China through the holding of any office, employment, the performance of a contract, etc.;
2. income related to operating activities derived from operating activities carried out within the territory of China;
3. income derived from the leasing of property to a lessee for use within the territory of China;
4. income derived from the licensing for use within the territory of China of any kind of licensing rights;
5. income derived from the transfer of immovable property and land use rights within the territory of China; income derived from the transfer of equity assets formed from investment in enterprises, institutions and other economic organizations within the territory of China; and income derived from the transfer of movable property and other property within the territory of China;
6. income from author's remuneration and casual income paid or borne by enterprises, institutions, other economic organizations and residential individuals within the territory of China; and
7. interest, dividend and bonus income derived from any enterprise, public institution, or other economic organization or individual resident within the territory of China.
Article 4 For income derived outside the territory of China by any resident individual who has no domicile in China but has resided in China for not more than five consecutive years in each of which he resided for 183 days or more accumulatively, or but has resided in China for more than five consecutive years in each of which he resided for 183 days or more accumulatively but during which he left China for more than 30 days on a single trip, subject to record-filing with the competent tax authority, individual income tax may be paid only on that part of his income that is derived from enterprises, institutions and other economic organizations or resident individuals within the territory of China; any taxpayer who has resided in China for more than five consecutive years in each of which he resided for 183 days or more accumulatively and during which he did not leave China for more than 30 days on a single trip, shall, commencing from the sixth year, pay individual income tax on all the income derived outside the territory of China.
Article 5 For any individual who has no domicile within the territory of China, but who has resided in the territory of China for a consecutive or aggregate period of no more than 90 days in a tax year, that part of his income that is sourced within the territory of China but is paid by an employer outside the territory of China, and which is not borne by any organization or office of the relevant employer located in the territory of China, shall be exempt from individual income tax.
Article 6 The scope of the income categories described in Article 2 of the Individual Income Tax Law shall be as follows:
1. "Wage and salary income" means wages, salaries, bonuses, year-end bonuses, profit shares, subsidies, allowances earned by individuals by virtue of the holding of any office or employment and other income earned by individuals relating to the holding of any office or employment;
2. "Income from remuneration for personal services" means income derived by individuals from engaging in design, decoration, installation, drafting, laboratory testing, other testing, medical treatment, legal, accounting, advisory, lecturing, news, broadcasting, translation, proofreading, painting and calligraphic, carving, film and television, sound recording, video recording, shows and concerts, performance, advertising, exhibition and technical services, introduction services, brokerage services, agency services and other personal services.
3. "Income from author's remuneration" means income derived by individuals by virtue of the publication of their works in books, newspapers and periodicals.
4. "Royalty income" means income derived by individuals from granting the right to use patents, trademarks, copyrights, non-patented technology and other licensing rights. Income derived from granting the right to use copyrights shall not include income from author's remuneration.
5. Business income means:
(1) income derived by individuals from engagement in the production and operating activities through individual businesses, sole proprietorship enterprises, and partnerships registered in China;
(2) income derived by individuals from engaging in the provision of educational, medical, advisory and other service activities for consideration, after having obtained the required licenses;
(3) income derived by individuals from contracting, renting, subcontracting or subletting;
(4) income derived by individuals from engagement in other production and operating activities.
6. "Interest, dividend and bonus income" means income from interest, dividends and bonuses derived by individuals by virtue of their ownership of creditors' rights and share rights;
7.
......