On 20 October 2018, the Ministry of Finance and the State Administration of Taxation of the People`s Republic of China published the “Notice of the Ministry of Finance and State Administration of Taxation on Soliciting Public Comments on Interim Measures for Special Additional Deductions for Individual Income Tax” (hereinafter referred to as “Exposure Draft”) for soliciting public comments until 4 November 2018.
The Exposure Draft supplements the newly drafted IIT Law released on 31 August 2018 and its “Implementation Regulations for the Individual Income Tax Law of the People's Republic of China”, which was released in notice for public comments on 20 October 2018.
This CLR intends to further clarify the new IIT Law by describing and explaining the special additional deductions that can be made by the taxpayer.
Such in total six types of special additional deductions as explained in detail in the Exposure Draft are as follows:
1 Children`s education 2 Continuing education 3 Serious illness medical treatment 4 Housing loan interest 5 Housing rent 6 Caring for the elderly
Undoubtedly, the New IIT Law will have significant impact on the tax collection system in China.