China IIT Special Additional Deductions Confirmation starts!

Starting from December 1, 2023, until December 31, 2023, the confirmation process for annual individual income tax (IIT) special additional deductions will commence. This article provides important information for all individuals, including expatriates working in China, regarding their eligibility for relevant special additional deductions. It is advised that eligible individuals promptly confirm their special additional deduction information through designated channels before the end of the month to ensure tax savings for the following year.

Understanding IIT Special Additional Deductions: In 2019, China introduced special additional deductions for specific expenditures as part of the amended IIT Law. These deductions are applicable to resident individuals in China and are subtracted from the taxable income amount. The special additional deductions cover seven types of expenses, including nursing expenses for children under three years old, children's education expenses, continuing education expenses, healthcare costs for serious illness, housing loan interest, expenses for supporting the elderly, and housing rent.

Confirmation Process for Expatriates: Expatriate employees who meet the resident taxpayer standards can also avail themselves of the special additional deductions. However, they must choose between tax-exempt fringe benefits and special additional deductions; both cannot be enjoyed simultaneously. Once a choice is made, it remains valid for the entire calendar year. Therefore, expatriate employees planning to stay in China for over 183 days in 2024 and opting for special additional deduction policies need to confirm their special additional deduction information in December 2023, similar to their Chinese coworkers.

Confirmation Channels: Individual taxpayers, including foreigners, can conveniently confirm their special additional deduction information using the IIT app (app: 个人所得税) or the e-tax system website (etax.chinatax.gov.cn, the Online Tax Bureau for Natural Persons).

The confirmation process for annual individual income tax (IIT) special additional deductions is a crucial step in maximizing tax savings. It is essential for all individuals, including expatriates working in China, to determine their eligibility and promptly confirm their special additional deduction information before the end of December. By understanding the available deductions and utilizing the designated channels for confirmation, individuals can ensure they benefit from the IIT special additional deduction policies in the following year.

Editor: CH

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