Public Notice of the State Administration of Taxation Regarding the Voluntary Individual Income Tax Filing and Payment (Public Notice [2018] No. 62)

21 December 2018

Further to the newly released Individual Income Tax ("IIT") Law and its Detailed Implementation Rules ("DIRs"), the State Administration of Taxation ("SAT") released this Public Notice on 21 December 2018. The Public Notice consists of 9 articles, which mainly includes the tax filing for non-resident individuals deriving wages and salaries from more than two sources in China, types of taxpayers who are required to self-report IIT, as well as the timeline, location, required documentation, and methods for self-reporting IIT. The Public Notice shall take effect from 1 January 2019.

Abstract

The State Administration of Taxation ("SAT") released the above Public Notice on 21 December 2018 setting forth the administrative regulations on Individual Income Tax ("IIT") withholding and reporting in the Mainland and has come into force as of 1 January 2019.

As required by the IIT Law, Public Notice No. 62 specifically sets out the following administrative details:

1. Tax declaration under the circumstance where a taxpayer receives consolidated income and needs to process final settlement and payment of tax
2. Tax declaration under the circumstance where a taxpayer receives business income
3. Tax declaration under the circumstance where a taxpayer receives taxable income but the withholding agent does not withhold tax
4. Tax declaration under the circumstance where a taxpayer receives overseas income
5. Tax declaration under the circumstance where a taxpayer is to deregister its household registration in the Mainland for the purpose of emigrating overseas
6. Tax declaration under the circumstance where a non-resident individual derives income from wages and salary from two or more sources in the Mainland

Besides, below are the main points set out in Public Notice No. 62:

Non-resident taxpayers

Where the withholding agent does not withhold tax, the non-resident individual who receives income from wages or salary, income from remuneration for personal services, income from author's remuneration, or royalty income shall handle the tax declaration with the competent tax authority in the place where the withholding agent is located before 30 June of the year after which the income is received.

Where a non-resident individual receives income from wages and salary from two or more sources within the territory of the Mainland, it shall, before the 15th day of the month after which the income is received, handle the tax declaration with the competent tax authority in the place where one of its employers is located.

Tax Declaration for Household Deregistration

Where a taxpayer receives consolidated income or business income in the year of household deregistration, it shall handle the final settlement and payment of tax before the deregistration.

Where a taxpayer receives income from interest, dividends and bonuses, income from property leases, income from property transfers or incidental income in the year of deregistration of household registration, it shall declare the payment of tax on the above income received in the current year before the deregistration.

Where a taxpayer fails to pay or underpays the tax, it shall settle the underpaid or unpaid tax before household deregistration. Where a taxpayer makes the instalment payment of tax and fails to complete such payment, it shall also settle the unpaid tax before the deregistration.