Circular of the State Administration of Taxation on Operational Issues concerning the Collection of Individual Income Tax on Deposit Interest

Circular of the State Administration of Taxation on Operational Issues concerning the Collection of Individual Income Tax on Deposit Interest

Guo Shui Fa [1999] No.180

October 8, 1999

The national taxation bureaus and local taxation bureaus of the various provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan, 

With the goal of further implementing the Measures of the State Council for the Implementation of Individual Income Tax on Deposit Interest (hereinafter referred to as the Implementation Measures), we hereby summarize certain specific operational issues concerning the collection of individual income tax on interest income derived from deposits as set out below in accordance with the Individual Income Tax Law of the People's Republic of China and the Implementation Measures:

I. The definition of interest income derived from deposits
In accordance with the provisions of the Implementation Measures, interest income received on any deposit balance held by an individual and paid directly by a deposit taking institution that is a commercial bank, urban credit cooperative, or rural credit cooperative, or is a postal enterprise, shall be subject to individual income tax payable on deposit interest income in accordance with the provisions of the Implementation Measures, and the administration and collection of such tax shall be the responsibility of the State Administration of Taxation. Other forms of interest income received by any individual shall be subject to individual income tax payable on the income category of "interest, dividends and special dividends," and the administration and collection of such tax shall be the responsibility of the local taxation bureaus.

II.
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