Income Tax Self-Declaration for China Individual Taxpayers

If you are an indi­vid­ual tax­pay­er in Chi­na, you may need to make a self-dec­la­ra­tion of your income tax to the tax author­i­ties. This is a process of report­ing your tax­able income and pay­ing the cor­re­spond­ing tax amount accord­ing to the law. Self-dec­la­ra­tion is dif­fer­ent from with­hold­ing, which is when your employ­er or oth­er enti­ty deducts the tax from your income and pays it to the tax author­i­ties on your behalf.

Self-dec­la­ra­tion is required for cer­tain types of income or tax­pay­ers who meet cer­tain con­di­tions. In this arti­cle, we will explain what self-dec­la­ra­tion is, who needs to do it, how to do it, and what ben­e­fits you can get from it.

What is Self-Declaration of Income Tax?

Self-dec­la­ra­tion of income tax is a way of ful­fill­ing your tax oblig­a­tions by your­self. It means that you need to cal­cu­late your tax­able income, apply the rel­e­vant tax rates and deduc­tions, fill in the tax return form, and sub­mit it to the tax author­i­ties along with the pay­ment of the tax due.

Self-dec­la­ra­tion is not applic­a­ble to all types of income or tax­pay­ers. Accord­ing to the Law of the Peo­ple’s Repub­lic of Chi­na on Indi­vid­ual Income Tax (IIT Law), there are two main cat­e­gories of income that require self-declaration:

• Com­pre­hen­sive income: This includes wages and salaries, remu­ner­a­tion for per­son­al ser­vices, author’s remu­ner­a­tion, and roy­al­ties. If you have com­pre­hen­sive income from more than one source with­in Chi­na, or if your annu­al com­pre­hen­sive income exceeds 120,000 RMB, you need to make a self-dec­la­ra­tion of your com­pre­hen­sive income on an annu­al basis.
• Income from oth­er sources: This includes income from inter­est, div­i­dends, bonus­es, lease of prop­er­ty, trans­fer of prop­er­ty, con­tin­gent income, and oth­er income as pre­scribed by the State Coun­cil. If you have income from these sources and there is no with­hold­ing agent or the with­hold­ing agent fails to with­hold or pay the tax on your behalf, you need to make a self-dec­la­ra­tion of your income from oth­er sources with­in 15 days after receiv­ing the income.

In addi­tion, if you are a res­i­dent tax­pay­er who has domi­cile in Chi­na or who has resided in Chi­na for more than 183 days in a tax year, you also need to make a self-dec­la­ra­tion of your income from over­seas sources with­in 30 days after the end of each tax year.

If you fail to make a self-dec­la­ra­tion of your income tax as required by law, you may face penal­ties such as late fees, fines, or even crim­i­nal charges.

Who Needs to Make a Self-Declaration of Income Tax?

Accord­ing to the IIT Law and its imple­men­ta­tion reg­u­la­tions, you need to make a self-dec­la­ra­tion of your income tax if you meet any of the fol­low­ing conditions:

• You are a res­i­dent tax­pay­er who has domi­cile in Chi­na or who has resided in Chi­na for more than 183 days in a tax year, and you have income from over­seas sources.
• You are a res­i­dent tax­pay­er who has com­pre­hen­sive income from more than one source with­in China.
• You are a res­i­dent tax­pay­er who has annu­al com­pre­hen­sive income exceed­ing 120,000 RMB.
• You are a non-res­i­dent tax­pay­er who has no domi­cile and has resided in Chi­na for less than 183 days in a tax year, and you have income from oth­er sources with­in Chi­na that is not sub­ject to withholding.
• You are an indi­vid­ual tax­pay­er who has income from equi­ty trans­fer or restrict­ed stock transfer.
• You are an indi­vid­ual tax­pay­er who has invest­ed with per­son­al non-mon­e­tary assets.
• You are an indi­vid­ual tax­pay­er who is under any oth­er cir­cum­stances as pre­scribed by the State Council.

If you are not sure whether you need to make a self-dec­la­ra­tion of your income tax or not, you can con­sult with the local tax author­i­ties or a pro­fes­sion­al tax advi­sor for guidance.

How to Make a Self-Declaration of Income Tax?

To make a self-dec­la­ra­tion of your income tax, you need to fol­low these steps:

1. Pre­pare the required doc­u­ments, such as your pass­port, res­i­dence per­mit, income cer­tifi­cate, tax pay­ment receipt, and oth­er rel­e­vant materials.
2. Fill in the tax return form, which can be obtained from the local tax author­i­ties or down­loaded from their offi­cial web­site. You can also use the online tax ser­vice plat­form or the mobile app to fill in the form electronically.
3. Sub­mit the tax return form and the sup­port­ing doc­u­ments to the local tax author­i­ties or through the online tax ser­vice plat­form or the mobile app. You can also entrust a third par­ty, such as your employ­er, a trav­el agency, or a tax agent, to sub­mit the form on your behalf.
4. Pay the tax due accord­ing to the notice issued by the tax author­i­ties. You can pay the tax in cash, by bank trans­fer, by cred­it card, or by oth­er meth­ods approved by the tax authorities.

The dead­line for mak­ing a self-dec­la­ra­tion of your income tax varies depend­ing on the type and source of your income. Gen­er­al­ly speak­ing, you need to make a self-dec­la­ra­tion with­in 15 days after receiv­ing your income from oth­er sources, with­in 30 days after the end of each tax year for your income from over­seas sources, and with­in 3 months after the end of each tax year for your annu­al com­pre­hen­sive income.

If you have any ques­tions or dif­fi­cul­ties in mak­ing a self-dec­la­ra­tion of your income tax, you can con­tact the local tax author­i­ties or a pro­fes­sion­al YouWin Con­sult­ing advi­sor for assis­tance at info@​youwinconsulting.​com.

What Benefits Can I Get from Making a Self-Declaration of Income Tax?

Mak­ing a self-dec­la­ra­tion of your income tax is not only a legal oblig­a­tion but also a poten­tial ben­e­fit for you. By mak­ing a self-dec­la­ra­tion of your income tax, you can enjoy the fol­low­ing advantages:

• You can claim var­i­ous deduc­tions and exemp­tions that may reduce your tax­able income and low­er your tax bur­den. For exam­ple, you can deduct expens­es for social insur­ance, hous­ing fund, edu­ca­tion, med­ical care, mort­gage inter­est, rent, elder­ly care, chil­dren’s edu­ca­tion, and con­tin­u­ing edu­ca­tion. You can also claim spe­cial addi­tion­al deduc­tions for char­i­ta­ble dona­tions, major ill­ness med­ical expens­es, and oth­er items as pre­scribed by law.
• You can apply for a tax refund if you have over­paid your income tax due to with­hold­ing errors or oth­er rea­sons. For exam­ple, if you have paid more than 120 RMB per month for social insur­ance and hous­ing fund in dif­fer­ent places with­in Chi­na, you can apply for a refund of the excess amount. You can also apply for a refund if you have paid income tax in both Chi­na and anoth­er coun­try that has signed a tax treaty with China.
• You can avoid penal­ties and legal con­se­quences that may arise from fail­ing to make a self-dec­la­ra­tion of your income tax as required by law. If you do not make a self-dec­la­ra­tion of your income tax on time or accu­rate­ly, you may face late fees, fines, or even crim­i­nal charges. You may also lose some ben­e­fits or priv­i­leges that are relat­ed to your tax com­pli­ance status.

There­fore, mak­ing a self-dec­la­ra­tion of your income tax is not only a duty but also an oppor­tu­ni­ty for you to opti­mize your tax sit­u­a­tion and pro­tect your rights and interests.

Frequently Asked Questions about Income Tax Self-Declaration:

Sources:

1. BYC­PA | Chi­na Indi­vid­ual Income Tax – Self-Dec­la­ra­tion Rules Con­cern­ing Com­pre­hen­sive Income on a Con­sol­i­dat­ed Basis
2. State Tax­a­tion Admin­is­tra­tion | Self dec­la­ra­tion of Indi­vid­ual Income Tax
3. SJ Grand | Income Tax Self-dec­la­ra­tion for Indi­vid­ual Tax­pay­ers in China