Detailed Rules for the Implementation of the Individual Income Tax Law of the People's Republic of China
Detailed Rules for the Implementation of the Individual Income Tax Law of the People's Republic of China
Detailed Rules for the Implementation of the Individual Income Tax Law of the People's Republic of China (Revised in 2005)
Order of the State Council No.452
December 19, 2005
(Promulgated according to the order No.142 of the State Council of the P.R.C. on January 28, 1994 and became effective on the same day and amended in accordance with the Decision of the State Council on Amending the Regulation on the Implementation of the Individual Income Tax Law of the People's Republic of China on December 19, 2005)
Article 1 The rules are formulated in accordance with the Individual Income Tax Law of the People's Republic of China (hereinafter referred to as the "Tax Law"). (Pls refer to CEN No.50 of Dec.27, 1993 for the Tax Law)
Article 2 Individuals who reside in the
Article 3 Individuals who stay in
Article 4 Income derived from within the territory of China mentioned in Section 1 and 2 of Article 1 of the Tax Law means income derived from sources within the territory of China; income derived outside China means income derived from sources outside the territory of China.
Article 5 The following categories of income, regardless whether or not payments be made within China, shall be considered
income derived from sources within the territory of China:
1. Income derived from on job, employed or contracted labor service performed within the territory of China;
2. Income derived from leasing of property to others for use within the territory of China;
3. Income derived from transfer of buildings, land use rights or other property within the territory of China;
4. Income derived from granting of various franchises to be used within the territory of China; and
5. Income derived from interests, dividends and extra dividends from companies, enterprises and other economic organizations or individuals within the territory of China.
Article 6 Individuals who have no residence in China but have stayed in China for over one year but not exceeding five years, with approval of the tax authorities, shall pay individual income tax on that part of their income derived from the companies, enterprises, other economic organizations or individuals within the territory of China; individuals who have stayed in China for more than five years shall pay individual income tax on all their income derived outside China from the sixth year.
Article 7 Individuals who have no residence in China but who have stayed in China continuously or accumulatively not exceeding 90 days in a tax year shall be exempted from tax on the part of their income derived within the territory of China but paid by employers outside China and the payment not coming from the latter's institutions or places within the territory of China.
Article 8 The scope of the categories of income mentioned in Article 2 of the Tax Law is as follows:
1. Income derived from wages and salaries means income from wages, salaries, awards, year-end extra dividends, labor dividends, allowances, subsidies and other remunerations from their job or other income related with their employment;
2. Income derived from production and business operations by individual households engaging in industry and commerce means:
(1) Income derived from production and business operations by individual households engaging in manufacturing, handicraft, construction, communications and transportation, commerce, catering, service, repair and other industries;
(2) Income derived by individual from running school, medical service, consultation and other paid services upon approval or license
granted by related government departments;
(3) Income derived from production and business operations by other individuals; and
(4) Other taxable income related with production and business operations obtained by individual households engaging in industry and commerce and individuals mentioned above.
3. Income derived from contracting or leasing operations of enterprises and institutions means income obtained by individuals from operations of contracting, leasing, subcontracting and transfer of leasing rights, including the monthly or individual payments of wage and salary nature.
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