Sep 2023 - Regarding non-taxable allowances - policy for IIT
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Regarding non-taxable allowances - policy for IIT
The extension of the preferential policy for individual income tax regarding non-taxable allowances
To further reduce the burden of taxpayers, the State Administration of Taxation (SAT) announced the tax preferential policy for individual income tax(“IIT”) aiming at the foreign employee’s non-taxable allowances will be extended to December 31st, 2027.
We summarize hereafter the main measures for your information.
Non-taxable items for foreign employees
Foreign employees can deduct the following items from their IIT calculation:
- Housing rental
- Children education
- Language learning
- Home return
- Meal and laundry
- Relocation
Point of attention
- We highlight that these allowances must be mentioned in the labor contract and supported by relevant tax invoices or/and supporting document and declared at the tax bureau in order to benefit of individual income tax exemption.
Should you have any questions, please don’t hesitate to contact us.
References:
- Ministry of Finance and State Administration of Taxation, [2023] No.29: Notice on the continuation of the implementation of individual income tax preferential policies relating to Subsidies and Allowances for Foreign Individual