Income tax declaration is an important obligation of every individual earner. In China, the individual income derived from China and overseas are taxable under the country’s tax policy. Hence, taxpayers are required to conduct self-declaration or self-reporting of their comprehensive income according to China’s IIT law.
Read our previous article on China’s IIT Law Withholding Measures for 2019 Released
The rules in China regarding tax declaration depends on different cases. Especially, the taxpayers are categorized based on their tax residency status – whether resident or non-resident. This article will guide you through the specific rules on declaring your taxable income.
Who may be required to declare individual income tax?
1. Taxpayers with an annual income of RMB 120,000 need to declare within 3 months after the end of the tax year. These include:
- Individuals having no domicile in China;
- Individuals who have resided in China for 183 days or less.
2. Taxpayers with a foreign income need to declare within 30 days after the tax year ends. These include:
- Individuals with either domicile or non-domicile status but have a residence in China for 183 days or less (or one tax year).
3. Taxpayers with two or more sources of income (wages and salaries) in China need to declare within 15 days of the next month. These include:
- Individuals who obtain taxable income;
- With no withholding agent;
- Any other circumstances required by the State Council.
4. Taxpayers with equities transferred to any other individual or entity need to declare within 15 days of the following month.
5. Taxpayers with income from the transfer of restricted stock must also declare.
6. Taxpayers with investments on personal non-monetary assets should conduct annual filing and payment of IIT within the deadline or tax payment limits agreed upon.
On the individual income tax from restricted stock transfer
The tax settlement for restricted stock transfer is pre-withheld and prepared by securities institutions. It should be handled within 3 months as of the first day of the following month. On the other hand, taxpayers who adopt self-declaration will have to report their IIT income on the transfer within the first 15 days of the next month.
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