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Human Resource & Tax Alert Issue No.2022001 – China extends certain favorable Individual Income Tax (IIT) treatment from 1 January 2022
Based on Caishui [2018] No.164 (Notice on several transitional rules concerning favorable IIT treatments under the new IIT regime), the favorable tax treatment on annual bonus, non-taxable benefits for foreign nationals and equity income from listed companies is applicable until 31 December 2021. As such, companies and indiviuals have been very concerned about the relevant tax treatment after 2022.
On 31 December 2021, the Ministry of Finance (MOF) and the State Taxation Administration (STA) jointly issued MOF/STA Announcement [2021] No. 42 and MOF/STA Announcement [2021] No. 43 (hereinafter referred to as Announcement 42 and Announcement 43). The two circulars extend the favorable tax treatment on annual bonus, non-taxable benefits for foreign nationals and equity income from listed companies, etc.