The Individual Income Tax Law was promulgated in 1980 and amended in 1993, 1999, 2005, 2007, 2011 and 2018 respectively. The latest revision entered into force on January 1, 2019.

There are 22 articles in total.

The key points are as follows:

1.A resident individual is an individual who is domiciled in China or who is not domiciled in China but has stayed in the aggregate for 183 days or more of a tax year in China. A resident individual shall, in accordance with the provisions of this Law, pay individual income tax on his or her income obtained inside and outside China.

2.A nonresident individual is an individual who neither is domiciled in China nor stays in China or who is not domiciled in China but has stayed in the aggregate for less than 183 days of a tax year in China. A nonresident individual shall, in accordance with the provisions of this Law, pay individual income tax on his or her income obtained inside China.

3.Individual income tax rates:

(1) Consolidated income shall be taxed at progressive rates ranging from 3% to 45% (see tax rate schedule attached);

(2) Income from business operation shall be taxed at progressive rates ranging from 5% to 35% (see tax rate schedule attached);

(3) Income from royalties, income from interest, dividends and bonuses, income from lease of property, income from transfer of property and contingent income shall be subject to proportional tax rate, the tax rate shall be 20%.

4.For the income obtained by a resident individual from outside China, the amount of individual income tax already paid outside China by the individual may be deducted from the amount of tax payable by the individual, but the tax credit shall not exceed the amount of tax payable on the income obtained by the taxpayer from outside China as calculated in accordance with the provisions of this Law.