We use cookies to personalise the website and offer you the greatest added value. They are, among other purposes, used to analyse visitor usage in order to improve the website for you. By using this website, you agree to their use. Further information can be found in our data privacy statement.



China: Big Present by end of 2021! – Extension of Preferential IIT Policy on Annual Bonus

PrintMailRate-it

published on 30 December 2021 | reading time approx. 1 minute

 

Yesterday Chinese government announced that the preferential IIT treatment on one-time annual performance-related bonus will be extended for another two years, till the end of 2023.

 

According to the prevailing IIT regulation, one-time annual performance-related bonus received by a resident taxpayer of China (both Chinese and foreign resident) can be taxed for IIT separately from the other regular monthly salaries and be subject to a lower tax rate, which is determined by 1/12 of the bonus amount. Such treatment can be used only once per calendar year.

 

It was announced in 2018 that the above tax preferential treatment on annual bonus would be abolished by 31 December 2021, which has been a big concern of many taxpayers due to the increase of their IIT burdens.

 

For many it is a big present that the extension of the IIT treatment on bonus policy still came out, right before the end of 2021. Taxpayers and employers are recommended to review the annual packages and incentive bonus schemes in order to benefit from the extension of policy in a compliant way.

Contact

Contact Person Picture

Vivian Yao

Partner

+86 21 6163 5200
+86 21 6163 5299

Send inquiry

Contact Person Picture

Monica Chen

Senior Associate

+86 21 6163 5297
+86 21 6163 5299

Send inquiry

 How we can help

 Read more

Deutschland Weltweit Search Menu