Circular of the State Administration of Taxation on Printing and Distributing the Provisions on Several Issues on Imposition of Individual Income Tax
Circular of the State Administration of Taxation on Printing and Distributing the Provisions on Several Issues on Imposition of Individual Income Tax
Circular of the State Administration of Taxation on Printing and Distributing the Provisions on Several Issues on Imposition of Individual Income Tax
Guo Shui Fa [1994] No. 89
March 31, 1994
The tax bureaus of various provinces, autonomous regions and municipalities, to the tax bureaus of various cities with independent planning and to various sub-bureaus of the Offshore Oil Tax Administration,
The Provisions on Several Issues on Imposition of Individual Income Tax we have formulated is hereby printed and distributed to you, please conscientiously put it into practice. These Provisions go into effect on January 1, 1994.
Provisions on Several Issues on Imposition of Individual Income Tax
In order to better implement the Individual Income Tax Law of the People's Republic of China (hereinafter referred to as Tax Law) and Provisions for Its Implementation (hereinafter referred to as Provisions), conscientiously do a good job of the collection and management of individual income tax, in the spirit of the stipulations of the Tax Law and Provisions, some specific questions are hereby clarified as follows:
I. The question concerning how to understand "habitual residence":
Article 2 of the Provisions stipulates that individuals who have residences within the territory of China refer to those individuals who live habitually within the territory of China because they have households, families and relations of economic interests, the term "habitual residence" is a standard of a legal significance which is used to determine whether the tax payer is a resident or non- resident, not refer to the actual residence or the apartment in a particular period. For example, those individuals who live outside China due to study, work, visiting relatives or tour, after the end of these activities, the reasons for them to live outside China no longer exist and therefore must retur to live within China, then China is the country of the tax payer's habitual residence.
II. The question concerning the imposition of tax on the income from wages and salaries:
Item 1 in Clause 1 of Article 8 of the Provisions clearly stipulates the concrete contents of the income gained from wages and salaries and the tax- imposing scope, tax shall be levied strictly in accordance with the stipulations. As to the question regarding whether some specific income items such as subsidies and allowances should be included into the tax-imposing scope related to income gained from wages and salaries, the matter shall be handled and implemented in light of the following conditions:
1.Article 13 of the Provisions stipulates that the special government allowances distributed in accordance with the State Council stipulations and the subsidies and allowances on which individual income tax are exempt according to State Council stipulation shall be exempt from individual income tax. Tax shall be levied on various other subsidies and allowances which shall be included into the items of wage and salary incomes.
2.The following subsidies and allowances essentially not belonging to wage and salary or not belonging to income gained from the tax payer's own wage and salary are exempt from tax:
(1). One-child subsidies;
(2). The balance of subsidies and allowances not included in the total amount of basic wage for implementing the public functionary wage system and non-staple food subsidies for family members;
(3). Nursery subsidies;
(4). Travel expense allowances and meal allowance.
III. Question concerning the imposition of tax on the wage and salary income earned by Chinese personnel working with enterprise with foreign investment, foreign enterprises and foreign organizations inChina
China
......
Guo Shui Fa [1994] No. 89
March 31, 1994
The tax bureaus of various provinces, autonomous regions and municipalities, to the tax bureaus of various cities with independent planning and to various sub-bureaus of the Offshore Oil Tax Administration,
The Provisions on Several Issues on Imposition of Individual Income Tax we have formulated is hereby printed and distributed to you, please conscientiously put it into practice. These Provisions go into effect on January 1, 1994.
Provisions on Several Issues on Imposition of Individual Income Tax
In order to better implement the Individual Income Tax Law of the People's Republic of China (hereinafter referred to as Tax Law) and Provisions for Its Implementation (hereinafter referred to as Provisions), conscientiously do a good job of the collection and management of individual income tax, in the spirit of the stipulations of the Tax Law and Provisions, some specific questions are hereby clarified as follows:
I. The question concerning how to understand "habitual residence":
Article 2 of the Provisions stipulates that individuals who have residences within the territory of China refer to those individuals who live habitually within the territory of China because they have households, families and relations of economic interests, the term "habitual residence" is a standard of a legal significance which is used to determine whether the tax payer is a resident or non- resident, not refer to the actual residence or the apartment in a particular period. For example, those individuals who live outside China due to study, work, visiting relatives or tour, after the end of these activities, the reasons for them to live outside China no longer exist and therefore must retur to live within China, then China is the country of the tax payer's habitual residence.
II. The question concerning the imposition of tax on the income from wages and salaries:
Item 1 in Clause 1 of Article 8 of the Provisions clearly stipulates the concrete contents of the income gained from wages and salaries and the tax- imposing scope, tax shall be levied strictly in accordance with the stipulations. As to the question regarding whether some specific income items such as subsidies and allowances should be included into the tax-imposing scope related to income gained from wages and salaries, the matter shall be handled and implemented in light of the following conditions:
1.Article 13 of the Provisions stipulates that the special government allowances distributed in accordance with the State Council stipulations and the subsidies and allowances on which individual income tax are exempt according to State Council stipulation shall be exempt from individual income tax. Tax shall be levied on various other subsidies and allowances which shall be included into the items of wage and salary incomes.
2.The following subsidies and allowances essentially not belonging to wage and salary or not belonging to income gained from the tax payer's own wage and salary are exempt from tax:
(1). One-child subsidies;
(2). The balance of subsidies and allowances not included in the total amount of basic wage for implementing the public functionary wage system and non-staple food subsidies for family members;
(3). Nursery subsidies;
(4). Travel expense allowances and meal allowance.
III. Question concerning the imposition of tax on the wage and salary income earned by Chinese personnel working with enterprise with foreign investment, foreign enterprises and foreign organizations in
......