China's high income earners must now file individual income tax returns,
including foreigners, according to a new regulation issued by the national tax
authority on Wednesday.
Whether their companies have filed their incomes or not, they should file
individually again within three months after a fiscal year, said an article on
the State Administration of Taxation's Website.
The annual income threshold for domestic high income individuals is 120,000
yuan (US$15,190). Anyone making more than that must abide by the new rule and
file their income for the year. Tax-free incomes are not included in the filing,
but overseas incomes must be reported. Chinese tax laws stipulate that
foreigners except diplomats are also taxpayers in China.
Many high income individuals in the country obtain their income through
different channels, and some of these channels are not made public, so tax
authorities often have no record of it whatsoever, the administration said.
The new regulation clarifies high income individuals's obligations and legal
responsibilities for the first time to plug the loopholes.
It also provides several ways, including online and postal services, so
taxpayers can easily file their tax return.
The new regulation will enhance the tax imposition upon high income
individuals and help relieve the gap between the rich and poor, according to the
It may also promote the development of scientific and classified management
for different taxpayers and shorten the course of China's individual tax reform
from the current taxation pattern to a more advanced compound pattern.