October 31 2018

MOF and SAT Seek Public Opinions on Interim Measures for Individual Income Tax Deductions

The Ministry of Finance and the State Administration of Taxation recently released the Interim Measures for Special Additional Deductions from Individual Income Tax (Exposure Draft) to collect public opinions.

Taxpayers who have expenditures related to six items - children's education, continuing education, treatment of serious diseases, housing loan interest and apartment rents as well as support to seniors - will enjoy additional deductions to their taxable incomes. According to the draft plan, expenditures on children's education could be deducted at a fixed standard of 12,000 yuan a year, or 1,000 yuan per month. If taxpayers are supporting parents aged 60 or above, they could get tax deductions alone or along with other siblings. Taxpayers can also be entitled to tax deductions on interest expenses for their mortgage loans or rent expenditures.

Special Additional Deduction as followings

  Maximum (CNY / year)
Expenditures for education of children 12,000 / family
Continuing education 4,800 / person (diploma education)

3,600 / person (vocational qualification)

Medical treatment of serious diseases 60,000 / person
Housing loan interest 12,000 / family
Housing rents 9,600 – 12,200 / family
Raise of parents 24,000 / family


Note: Expats can choose the method of special additional deduction, or they can continue to enjoy previous IIT exemption policy for kids education, rents and flights twice a year etc.