Rules to ease financial burden of residents

Tax incentives for the lump sum annual bonuses earned by residents in China will continue for the next three years, the Ministry of Finance said on Thursday.

In addition, the government has also adjusted the personal income tax rules to ease the overall tax burden of residents, including foreign residents.

The favorable tax treatment, which started in 2005, considers the lump sum annual bonus as an independent income source of an individual. In normal taxable income calculations, the lump sum bonus is added to the total earnings for tax purposes, whereas in special treatment, the two are considered separately for taxes, with the bonus income attracting lower tax rates in general.