The Ministry of Finance and the State Taxation Administration released on December 31, 2021 two documents on the extension of some personal income tax policies.
- IIT preferential calculation for annual bonus
The preferential method for calculating IIT of annual bonus is extended its validity by STA until 31st December 2023. Generally, the method applies preferential IIT rate to annual bonus separately. Such amount shall be apportioned over 12 months for tax computation purpose, with no deduction, and subject to the Monthly Tax Rate Table for computation of tax payable amount. However, only tax resident individual shall enjoy and apply this tax computation method once within a calendar year.
- Expats’ subsidies and allowances
Originally, from 2022 expats shall cease to enjoy IIT exemption policies for subsidies and allowances such as housing allowance, language class fees, children education fees. Delightfully STA announced to extend the validity of IIT exemption policy for expats’ subsidy and allowance to 2023/12/31. The relevant subsidies and allowances are:
(1) The housing allowance, food allowance, relocation allowance and laundry charge received by individual aliens in the non-cash form or in the form of full expense reimbursement;
(2) The travel allowance received by individual aliens according to reasonable standards;
(3) The family reunion fee, the language training fee and the children's educational fee received by individual aliens that have been approved by the local tax authorities to be reasonable.