The Ministry of Finance and the State Administration of Taxation have recently issued a series of preferential policies for personal income tax, which will be implemented until the end of 2027. The announcement released by the two departments this time on the continuation of the implementation of the annual one-time bonus personal income tax policy states that resident individuals who obtain annual one-time bonuses comply with the provisions of the Notice of the State Administration of Taxation on Adjusting the Methods for Calculating and Levying Personal Income Tax on Individuals Obtaining Annual one-time bonuses, and are not included in the comprehensive income of the year. The amount obtained by dividing the annual one-time bonus income by 12 months is calculated and taxed separately. Individual residents who receive a one-time bonus for the whole year can also choose to be included in the comprehensive income calculation and tax payment for the year. The above policy will be implemented until December 31, 2027, which means that the year-end bonus and individual income tax preferential policy will be extended for another 4 years, further reducing the burden on taxpayers. Since 2019, China has implemented a new round of individual income tax reform, introducing a comprehensive income tax system. At the end of 2021, the Executive Meeting of the State Council decided to extend the separate tax incentives for another two years until the end of 2023. The two departments also recently released the "Announcement on Continuing the Implementation of Policies related to the Settlement and Payment of Comprehensive Income Tax for Individual Income" and the "Announcement on Continuing the Implementation of the Policy of Subsidizing Individual Income Tax for Foreign Individuals". It is mentioned that in order to further reduce the burden on taxpayers, residents who obtain comprehensive income from January 1, 2024 to December 31, 2027, and whose annual comprehensive income does not exceed 120000 yuan and requires settlement and payment of supplementary tax, or whose annual settlement and payment of supplementary tax does not exceed 400 yuan, are exempt from handling the settlement and payment of comprehensive income tax. Foreign individuals who meet the personal conditions of residents can choose to enjoy special additional deductions for personal income tax, or they can choose to follow the "Notice of the Ministry of Finance and the State Administration of Taxation on Several Policy Issues Concerning Personal Income Tax" According to the Notice of the State Administration of Taxation on the Implementation of the Levy of Individual Income Tax on Foreign Individuals Obtaining Subsidies and the Notice of the Ministry of Finance and the State Administration of Taxation on the Levy of Individual Income Tax on Foreign Individuals Obtaining Housing and Other Subsidies in Hong Kong and Macao, foreign individuals can enjoy tax exemption policies on housing subsidies, language training fees, children's education fees, and other subsidies, but cannot enjoy them simultaneously. Once selected, foreign individuals are not allowed to change within a tax year. The announcement will be implemented until December 31, 2027. In addition, according to the Announcement on Continuing the Implementation of the Individual Income Tax Policy for Ocean Sailors, for ocean sailors who have accumulated 183 days of sailing time within a tax year, their salary income shall be reduced by 50% and included in the taxable income, and individual income tax shall be paid in accordance with the law. (New News Agency)
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：Shanghai Securities Daily
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