Sept. 2011 - New changes in PRC Individual Income Tax
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New changes in PRC Individual Income Tax
The amended PRC Individual Income Tax (“IIT”) has become effective from 1 September 2011.
We summarize the salient points of the amendments relevant to employment income below for easy reference:
- Monthly deduction for employment income of local employees has been raised from RMB 2,000 to RMB 3,500. Corresponding monthly deduction for expatriates remains unchanged at RMB 4,800.
- Besides, progressive tax rates have also been changed. The first bracket in the tax rate has been reduced to 3% from 5% while 15% and 40% brackets have been cancelled. As a result, the number of tax brackets is reduced from 9 to 7.
