State Taxation Administration Announcement No. 62 of 2018

Note：

1.According to Announcement of the State Taxation Administration on Annual Individual Income Tax Reconciliation for Comprehensive Income in 2020 (State Taxation Administration Announcement No. 2 of 2021), Paragraph (2) of Article 1 shall cease to be effective from February 8, 2021.

2.According to Announcement of the State Taxation Administration on Annual Individual Income Tax Reconciliation for Comprehensive Income in 2021 (State Taxation Administration Announcement No. 1 of 2022), Article 1 and Article 4 shall cease to be effective from February 8, 2022.

3.According to Announcement of the State Taxation Administration on Annual Individual Income Tax Reconciliation for Comprehensive Income in 2022 (State Taxation Administration Announcement No. 3 of 2023), Article 1 and Article 4 shall cease to be effective from February 2, 2023.

In accordance with the newly amended Individual Income Tax Law of the People’s Republic of China and its Implementation Regulations, issues with respect to individual income tax filing are hereby announced as follows:

I. Tax filing where a taxpayer obtains comprehensive income for which annual tax reconciliation return is required

A taxpayer who obtains comprehensive income shall file an annual tax reconciliation return in accordance with the law under any of the following circumstances:

(1) Where the taxpayer obtains comprehensive income from two or more sources and the balance of annual comprehensive income after special deductions exceeds 60,000 yuan;

(2) Where the taxpayer obtains income from remuneration for personal services, author’s remuneration or royalties, and the balance of annual comprehensive income after special deductions exceeds 60,000 yuan;

(3) Where the amount of tax prepaid within a tax year is lower than the amount of tax payable; or

(4) Where the taxpayer applies for a tax refund.

Where the annual tax reconciliation return is required, the taxpayer shall file a tax return with the tax authority in charge at the place of employment within the period from March 1 to June 30 of the year following that in which the income is obtained, and submit Annual Individual Income Tax Return for Self-filing. Where there are two or more employers, the taxpayer may file a tax return with the tax authority in charge at the place where one of his/her employers is located. Where there is no employer, the taxpayer shall file a tax return with the tax authority in charge in the locality of his/her household registration or at the place where his/her habitual residence is located.

Before filing an annual tax reconciliation return for comprehensive income, the taxpayer shall prepare the information and documents related to his/her income, special deductions, itemized deductions for specific expenditures, other deductible items determined by law, donations, tax preferences, etc., and keep them for future inquiry or submit them in accordance with the regulations.

The specific measures for taxpayers to file an annual tax reconciliation return for comprehensive income will be announced separately.

II. Tax filing where a taxpayer obtains income from business operations

Income from business operation obtained by owners of individual businesses, investors of sole-proprietorship enterprises, individual partners of partnerships, personal operators of contracted and leased operation, and other individuals engaged in production and operation activities shall include the following:

(1) Income received by individual businesses from production and operation activities, and by investors of sole-proprietorship enterprises and individual partners of partnerships from the production and operation of sole-proprietorship enterprises and partnerships registered in China;

(2) Income received by individuals from provision of educational, medical, advisory and other paid services in accordance with the law;

(3) Income received by individuals from contracting, renting, subcontracting or subletting from enterprises and institutions; and

(4) Income received by individuals from engagement in other production and operation activities.

Where a taxpayer obtains income from business operation, the individual income tax shall be calculated on an annual basis. The taxpayer shall file the prepayment tax return for such income with the tax authority in charge at the place of operation and management within 15 days after the end of each month or quarter, and submit Individual Income Tax Return for Income from Business Operation (Form A). The taxpayer shall complete the annual individual income tax reconciliation for income from business operation before March 31 of the year following that in which the income is obtained, and submit Individual Income Tax Return for Income from Business Operation (Form B). Where the taxpayer obtains income from business operation from two or more sources, he/she may file an aggregate annual tax return with the tax authority in charge at one of the places of operation and management, and submit Individual Income Tax Return for Income from Business Operation (Form C).

III. Tax filing where a taxpayer obtains taxable income and the withholding agent fails to withhold tax

Where a taxpayer obtains taxable income and the withholding agent fails to withhold tax, tax filing shall be divided into the following circumstances:

(1) Where a resident individual obtains comprehensive income, Article 1 of this Announcement shall apply.

(2) Where a non-resident individual obtains income from salary and wages, remuneration for personal services, author’s remuneration or royalties, the taxpayer shall file a tax return with the tax authority in charge at the place where the withholding agent is located by June 30 of the year following that in which the income is obtained, and submit Individual Income Tax Return for Self-filing (Form A). Where there are two or more withholding agents and both/all fail to withhold tax, the taxpayer may file a tax return with the tax authority in charge at the place where one of the withholding agents is located.

Where a non-resident individual leaves China (with the exception of temporary leave) by June 30 of the year following that in which the income is obtained, he/she shall complete tax filing before such leave.

(3) Where a taxpayer obtains income from interest, dividends or bonuses, leasing of assets, transfer of assets or incidental income, he/she shall file a tax return with the tax authority in charge in accordance with relevant regulations by June 30 of the year following that in which the income is obtained, and submit Individual Income Tax Return for Self-filing (Form A).

Where the tax authority sets a time limit for the tax payment, the taxpayer shall pay the tax within the limit.

IV. Tax filing where a taxpayer obtains income from outside China

Where a resident individual obtains income from outside China, he/she shall file a tax return with the tax authority in charge at the place of employment within China within the period from March 1 to June 30 of the year following that in which the income is obtained. Where the taxpayer is unemployed within China, he/she shall file a tax return with the tax authority in charge in the locality of his/her household registration or at the place where his/her habitual residence within China is located. Where there is inconsistency between the location of the household registration and the habitual residence within China, the taxpayer may choose one of the aforesaid places to file a tax return with the tax authority in charge. Where there is no household registration within China, the taxpayer shall file a tax return with the tax authority in charge at the place where his/her habitual residence within China is located.

The specific regulations for taxpayers to file a tax return for income obtained from outside China shall be announced separately.

V. Tax filing where a taxpayer cancels his/her Chinese household registration for emigration

Where a taxpayer cancels his or her Chinese household registration for emigration, he/she shall file a tax return with the tax authority in charge in the locality of his/her household registration and complete tax settlement prior to deregistration.

(1) Where the taxpayer obtains comprehensive income in the year of deregistration, he/she shall file an annual tax reconciliation return for comprehensive income for the year prior to deregistration, and submit Annual Individual Income Tax Return for Self-filing. Where the annual tax reconciliation return for comprehensive income for the previous year has not been filed, the taxpayer shall complete the filing when he/she files a tax return for deregistration.

(2) Where the taxpayer obtains income from business operation in the year of deregistration, he/she shall file an annual tax reconciliation return for income from business operation for the year prior to deregistration, and submit Individual Income Tax Return for Income from Business Operation (Form B). Where the taxpayer obtains income from business operation from two or more sources, Individual Income Tax Return for Income from Business Operation (Form C) shall be submitted together with Form B. Where the annual tax reconciliation return for income from business operation for the previous year has not been filed, the taxpayer shall complete the filing when he/she files a tax return for deregistration.

(3) Where the taxpayer obtains income from interest, dividends or bonuses, leasing of assets, transfer of assets, or incidental income in the year of deregistration, he/she shall complete the tax payment for the aforesaid incomes of the year prior to deregistration and submit Individual Income Tax Return for Self-filing (Form A).

(4) Where the taxpayer does not pay or underpays taxes, he/she shall settle underpaid or unpaid taxes prior to deregistration. Where the taxpayer pays tax by installments and the payment has not been completed, he/she shall settle unpaid taxes prior to deregistration.

(5) When the taxpayer files a tax return for deregistration, and itemized deductions for specific expenditures and other deductible items determined by law are requested, he/she shall submit Information Form for Itemized Deductions for Specific Expenditures of Individual Income Tax, Detailed Statement on Pre-tax Deductions of Commercial Health Insurance and Detailed Statement on Pre-tax Deductions of Individual Tax-Deferred Commercial Pension Insurance, etc., to the tax authority.

VI. Tax filing where a non-resident individual obtains salary and wages from two or more sources within China

Where a non-resident individual obtains salary and wages from two or more sources within China, he/she shall file a tax return with the tax authority in charge at the place where one of his/her employers is located by the 15th day of the month following that in which the income is obtained, and submit Individual Income Tax Return for Self-filing (Form A).

VII. Methods of tax filing

Taxpayers may file their tax returns through remote online portals, by mail, etc., or directly with tax authorities in charge.

VIII. Other relevant issues

(1) Taxpayers shall submit other relevant information and documents required by the tax authorities when making self-filing. Taxpayers shall also submit Basic Information Form For Individual Income Tax (Form B) when they are filing for the first time or there are any changes in basic personal information.

The formats of forms, certificates, vouchers and documents related to this Announcement shall be separately formulated and issued by the State Taxation Administration.

(2) Where a taxpayer needs to claim tax treaty benefits when filing his/her tax return, relevant measures for claiming tax treaty benefits shall apply.

IX. Effective date

This Announcement shall enter into force from January 1, 2019.

It is hereby announced.

State Taxation Administration

                                              December 21, 2018

All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.