Residentsare generally subject to Chinaindividual income tax (IIT) on their worldwide income. Non-residentsare generallytaxedin China on their China-source income only(see the Residence section for more information).
An individual is taxed in China on one's income by category. China's IIT law groups personal income into9 categories.
The9 categories of income are:
- Employment income (i.e. wages and salaries).
- Remuneration for labour services.
- Author's remuneration.
- Royalties.
- Businessincome.
- Interest, dividends, and profit distribution.
- Rental income.
- Income from transfer of property.
- Incidental income.
Each income category has its own tax rate(s), allowable deductions,etc.
For residents, employment income, remuneration for labour services, author’s remuneration, and royalties are combined as 'comprehensive income' for aggregate tax calculation purpose on an annual basis. Incomefrom the other categories is taxed separately by category on a monthly or transaction basis.
For non-residents, income from each of the 9 categories is taxed separately on a monthly or transaction basis.
Personal income tax rates
Comprehensive income tax rates
For residents, calculation of IIT on annual comprehensiveincomeis based on progressive tax rates (seeTable Ibelow) using the following formula:
(Annualtaxable income x Tax rate) - Quick deduction
Table I
| Annual taxable income (CNY*) (1) | Tax rate (%) | Quick deduction (CNY) |
| 0to 36,000 | 3 | 0 |
| Over 36,000to 144,000 | 10 | 2,520 |
| Over 144,000to 300,000 | 20 | 16,920 |
| Over 300,000to 420,000 | 25 | 31,920 |
| Over 420,000to 660,000 | 30 | 52,920 |
| Over 660,000to 960,000 | 35 | 85,920 |
| Over 960,000 | 45 | 181,920 |
* renminbi
Notes
- Annualtaxable income after deducting the standard basic deduction, specific deductions, specific additional deductions, and other allowable deductions (see the Deductions section for more information).
For non-residents,IIT on employment income, remuneration for labour services, author’s remuneration, and royaltiesis calculatedby each category on a monthly or transaction basisat the belowprogressive tax rates (see Table II below).
Table II
| Monthly taxable income (CNY) | Tax rate (%) | Quick deduction (CNY) |
| 0to 3,000 | 3 | 0 |
| Over 3,000to 12,000 | 10 | 210 |
| Over 12,000to 25,000 | 20 | 1,410 |
| Over 25,000to 35,000 | 25 | 2,660 |
| Over 35,000to 55,000 | 30 | 4,410 |
| Over 55,000to 80,000 | 35 | 7,160 |
| Over 80,000 | 45 | 15,160 |
Business income tax rates
Income earned by individuals from privately-owned businesses, sole proprietorship enterprises, or partnerships is generally subject to IIT at progressive rates from 5% to 35%, as follows:
| Annualtaxable income (CNY) | Tax rate (%) |
| 0to 30,000 | 5 |
| Over 30,000to 90,000 | 10 |
| Over 90,000to 300,000 | 20 |
| Over 300,000to 500,000 | 30 |
| Over 500,000 | 35 |
Tax rates for other personal income
A flat rate of 20% is applied on the remaining categories of income, includingincidental income,rental income, interest income, dividends, and capital gains, unless specifically reduced by the State Council.
Local income taxes
There are no local taxes on personal income in China.
