In the past month, the Chinese authority has issued various circulars detailing the new rules and regulations on the individual income tax (“IIT”). The final Implementation Rules (the “Implementation Rules”) and the circulars are to implement the new IIT law passed by the Peoples’ Congress in August, 2018.

• On December 13, 2018, the State Council released the “Provisional Rules on the Specific Itemized Deduction for IIT purpose” (Guofa (2018) No. 41) (“Circular 41”)
• On December 18, 2018, the State Council finalized and announced the Implementation Rules which would take effect on January 1, 2019.
• On December 21, 2018, the SAT issued Public Notice (2018) No. 60 (“PN 60”) laying out the temporary measures dealing with the claiming of itemized deductions. - On December 27, 2018, the Ministry of Finance and SAT jointly released the circular Caishui [2018] No. 164 to specify the new tax preferential policies.

We summarize below the main changes and implications for individuals