Sept. 2011 - New changes in PRC Individual Income Tax - Mazars

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Sept. 2011 - New changes in PRC Individual Income Tax

The amended PRC Individual Income Tax (“IIT”) has become effective from 1 September 2011.

01/09/2011

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.