Circular on Issues concerning the Connection of Relevant Preferential Policies after the Revision of the Law on Individual Income Tax
Circular on Issues concerning the Connection of Relevant Preferential Policies after the Revision of the Law on Individual Income Tax
Circular on Issues concerning the Connection of Relevant Preferential Policies after the Revision of the Law on Individual Income Tax
Cai Shui [2018] No.164
December 27, 2018
Finance departments (bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government and cities separately listed in the State plan, tax bureaus of the State Administration of Taxation of all provinces, autonomous regions, municipalities directly under the Central Government and cities separately listed in the State plan, and the Bureau of Finance of Xinjiang Production and Construction Corps,
In order to implement the revised Law of the People's Republic of China on Individual Income Tax, the issues concerning the connection of preferential policies for individual income tax are hereby notified as follows:
I. Policy on Annual Lump Sum Bonuses and Income from the Deferred Encashment of the Annual Performance Remuneration and the Lieutenancy Reward to the Person in Charge of the Central Enterprise
1. The annual lump sum bonuses obtained by resident individuals in accordance with the Circular of the State Administration of Taxation on Adjusting the Method of Calculating and Imposing Individual Income Tax on Annual Lump Sum Bonuses and other Benefits Obtained by Individuals (Guo Shui Fa [2005] No.9) before December 31, 2021 shall not be included in the consolidated income of the current year and shall be separately taxed on the basis of the amount by dividing the annual lump sum bonuses by 12 months, subject to the applicable tax rate and the sum of quick calculation deduction determined according to the Consolidated Income Tax Rate Table (hereinafter referred to as the "Monthly Tax Rate Table") attached hereto after conversion by month. The calculation formula is as follows:
Amount of tax payable = Incomes from annual lump sum bonuses * applicable tax rate – sum of quick calculation deduction
The annual lump sum bonuses obtained by resident individuals may also be included in the consolidated income of the current year for the purpose of calculation and payment of tax.
As of January 1, 2022, the annual lump sum bonuses obtained by resident individuals shall be included in the consolidated income of the current year for the purpose of calculation and payment of individual income tax.
2. The income from the deferred encashment of the annual performance remuneration and the lieutenancy reward obtained by the person in charge of the central enterprise in accordance with the Circular of the State Administration of Taxation on Collection of Individual Income Tax on the Income from the Deferred Encashment of the Annual Performance Remuneration and the Lieutenancy Reward to the Person in Charge of the Central Enterprise (Guo Shui Fa [2007] No.118) before December 31, 2021 shall apply mutatis mutandis to Item 1 of Article 1 hereof; those after January 1, 2022 shall be separately clarified by the policies.
II. Policy on Equity Incentives of Listed Companies
1. Such equity incentives as stock options, stock appreciation rights, restricted stocks and equity rewards (hereinafter referred to as "equity incentives") obtained by resident individuals in accordance with the relevant conditions specified in the Circular of the Ministry of Finance and the State Administration of Taxation on Issues concerning the Imposition of Individual Income Tax on Incomes from Individual Stock Options (Cai Shui [2005] No.35), the Circular of the Ministry of Finance and the State Administration of Taxation on Issues concerning the Collection of Individual Income Tax on Income Derived from Stock Appreciation Rights and Restricted Stocks (Cai Shui [2009] No.5), Article 4 of the Circular of the Ministry of Finance and the State Administration of Taxation on Promoting the Pilot Tax Policies on National Independent Innovation Demonstration Zones Nationwide (Cai Shui [2015] No.116) and Item 1 of Article 4 of the Circular on Improving Income Tax Policies relating to Equity Incentives and Technology Shares (Cai Shui [2016] No.101) before December 31, 2021 shall not be included in the consolidated income of the current year and shall be separately taxed on the basis of the full amount separately subject to the Consolidated Income Tax Rate Table.
......
Cai Shui [2018] No.164
December 27, 2018
Finance departments (bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government and cities separately listed in the State plan, tax bureaus of the State Administration of Taxation of all provinces, autonomous regions, municipalities directly under the Central Government and cities separately listed in the State plan, and the Bureau of Finance of Xinjiang Production and Construction Corps,
In order to implement the revised Law of the People's Republic of China on Individual Income Tax, the issues concerning the connection of preferential policies for individual income tax are hereby notified as follows:
I. Policy on Annual Lump Sum Bonuses and Income from the Deferred Encashment of the Annual Performance Remuneration and the Lieutenancy Reward to the Person in Charge of the Central Enterprise
1. The annual lump sum bonuses obtained by resident individuals in accordance with the Circular of the State Administration of Taxation on Adjusting the Method of Calculating and Imposing Individual Income Tax on Annual Lump Sum Bonuses and other Benefits Obtained by Individuals (Guo Shui Fa [2005] No.9) before December 31, 2021 shall not be included in the consolidated income of the current year and shall be separately taxed on the basis of the amount by dividing the annual lump sum bonuses by 12 months, subject to the applicable tax rate and the sum of quick calculation deduction determined according to the Consolidated Income Tax Rate Table (hereinafter referred to as the "Monthly Tax Rate Table") attached hereto after conversion by month. The calculation formula is as follows:
Amount of tax payable = Incomes from annual lump sum bonuses * applicable tax rate – sum of quick calculation deduction
The annual lump sum bonuses obtained by resident individuals may also be included in the consolidated income of the current year for the purpose of calculation and payment of tax.
As of January 1, 2022, the annual lump sum bonuses obtained by resident individuals shall be included in the consolidated income of the current year for the purpose of calculation and payment of individual income tax.
2. The income from the deferred encashment of the annual performance remuneration and the lieutenancy reward obtained by the person in charge of the central enterprise in accordance with the Circular of the State Administration of Taxation on Collection of Individual Income Tax on the Income from the Deferred Encashment of the Annual Performance Remuneration and the Lieutenancy Reward to the Person in Charge of the Central Enterprise (Guo Shui Fa [2007] No.118) before December 31, 2021 shall apply mutatis mutandis to Item 1 of Article 1 hereof; those after January 1, 2022 shall be separately clarified by the policies.
II. Policy on Equity Incentives of Listed Companies
1. Such equity incentives as stock options, stock appreciation rights, restricted stocks and equity rewards (hereinafter referred to as "equity incentives") obtained by resident individuals in accordance with the relevant conditions specified in the Circular of the Ministry of Finance and the State Administration of Taxation on Issues concerning the Imposition of Individual Income Tax on Incomes from Individual Stock Options (Cai Shui [2005] No.35), the Circular of the Ministry of Finance and the State Administration of Taxation on Issues concerning the Collection of Individual Income Tax on Income Derived from Stock Appreciation Rights and Restricted Stocks (Cai Shui [2009] No.5), Article 4 of the Circular of the Ministry of Finance and the State Administration of Taxation on Promoting the Pilot Tax Policies on National Independent Innovation Demonstration Zones Nationwide (Cai Shui [2015] No.116) and Item 1 of Article 4 of the Circular on Improving Income Tax Policies relating to Equity Incentives and Technology Shares (Cai Shui [2016] No.101) before December 31, 2021 shall not be included in the consolidated income of the current year and shall be separately taxed on the basis of the full amount separately subject to the Consolidated Income Tax Rate Table.
......