On 1st January 2019, upon the implementation of “Operation Method of Special Additional Deduction on Individual Income Tax Guidance”, taxpayer can submit and register their special deduction information to the withholding agent or the competent tax authority by different method. The taxpayer need to update personal information in order to facilitate taxpayers to view and maintain personal information, enjoy tax benefits, and quickly reimburse taxes. It is necessary to collect relevant information, including personal information, employment information, family member information, bank cards and so on. Collecting taxpayer's special additional deduction information in related to the provisions of tax laws and regulations. If the taxpayer needs to make a special additional deduction, fill in the information according to the facts and submit it to the withholding agent or the tax authority. This guidance only applies to PRC Tax Resident (including PRC local resident and foreigners who have lived in China more than183 days in a calendar year).

In order to help you better understand the submission method, we have outline as below for you to choose

  1. Apps called “Personal Income Tax个人所得税”. The app requires individual identification and there are two ways to do it. You can either get the registration code which is valid for 7 days from tax authority counter or through face recognition authentication in the Apps but it only applicable for local China resident ID cards.
  2. Web page submission. The website is https://its.tax.sh.gov.cn/ . You need to visit tax authority counter to obtain the registration code in order to complete the individual identification and then find the “Special additional deduction filling in” option in the interface of the website, after that, fill in the details according to the actual, submit to the withholding agent and tax authority.
  3. Filling in the electronic form. Please refer to attachment personal income tax special deduction information table and instructions for filling out the form. After completing the electronic form, submit it to the withholding agent (employer)
  4. Filling in the paper-based form. The electronic information form can be printed and submitted to the withholding agent, and the withholding agent will fill in and submit it on your behalf.

About The Deduction

(1) If the taxpayer chooses to apply for deduction from the withholding agent (employer), you may directly submit the special information to the financial or human resources department of the withholding agent according to the above four methods.

(2) If the taxpayer chooses to report directly to the tax authorities, it is not necessary to provide relevant information to the (employer) withholding agent. When the individual submit their annual individual income tax return in the next year, the relevant information could be provided to the tax authorities and apply for tax refund.

If you choose the first or second submission methods, you only need to fill in the information and submit it by yourself. If you choose the third or fourth submission methods, you need to submit the relevant form to us, and we will submit it on your behalf. Since the special deduction information cannot be changed within a calendar year once it is determined, and any new additional deduction item still could be submitted. In order to avoid errors caused by timing difference on the submission and payroll calculation, your cooperation is very important for us:

  1. Regardless of the method of information submission, please complete the registration and the first information submission before January 15, 2019, and inform your contact person or account manager that the submission of information has been completed.

 

  1. For any additional special deduction item, please complete the submission by the 15th of the month and send the confirmation receipt to your account manager or contact person. If you did not enjoy the special deduction for any reason, you could either get the deduction in the following month or enjoy the special deduction in the annual Individual Income Tax return submitted in the next year.

NOTES

  1. Annual Bonus: Individuals receive a one-time annual bonus. Before December 31, 2021, the bonus will not be included in the comprehensive income of the year. They will still be divided into 12-month as annual bonus income according to the original calculation method. The amount obtained, which is the monthly comprehensive income tax rate table, determines the applicable tax rate and the quick calculation deduction, and calculates the tax separately. A one-time bonus for the whole year obtained by residents can be incorporated into the comprehensive income of the year to calculate the tax. However, from January 1st, 2022, a one-time annual bonus obtained by individual residents should be included in the comprehensive income of the year to calculate and pay personal income tax.

 

  1. In addition, from January 1, 2019 to December 31, 2021, the foreign individual who meets the conditions of the individual resident (PRC resident taxpayer) may choose to enjoy the special deduction of personal income tax, or choose to continue to enjoy the existing allowance policy of housing, language training, children's education and other tax exemption allowance policies until December 31, 2021. Foreign individuals cannot change their decision during a tax year once they make a choice. Since January 1, 2022, foreign individuals could no longer enjoy all the tax exemption allowance under old regulations. Foreign individual should follow special additional deductions as required as PRC tax resident.

 

For questions on how to fill out the special information forms, please call 12366, which is the tax hotline. If you have any other questions, please feel free to contact us. We are pleasure to assist you complete the information submission and the annual Individual Income Tax declaration. If you have such requirements, please feel free to contact us.

This article was created on: 2019.01.10