On 19 June 2018, a draft amendment of China’s Individual Income Tax Law was submitted to the 13th National People’s Congress Standing Committee for approval. This would be the seventh amendment to China’s tax law since it was introduced in 1980.
One of the proposed changes will be the individual income tax threshold raised to ¥5,000/month from the previous ¥3,500/month. Expenses such as children’s education, expenditure for serious illness treatment, housing rent and mortgage interest will be deductible. The new tax reform not only will reduce financial pressure on low and lower-middle income families who face rising living costs but also will level the playing field for locals and foreigners. The anti-avoidance rule is also designed and introduced into the individual tax system to discourage tax evasion.
For the detailed amendment of China’s Individual Income Tax Law click here (Chinese).