State Administration of Taxation, Measures for the Administration of Individual Income Tax

Promulgated: July 6 2005
Effective: October 1 2005
Interpreting authority: State Administration of Taxation
Applicability: Measures for the administration of individual income tax on saving deposit interest income shall be formulated separately (Article 55). In the event of a discrepancy between previous provisions and these Measures, these Measures shall prevail (Article 56). Matters not covered by these Measures shall be handled in accordance with tax collection laws, regulations and relevant provisions (Article 57).

Main contents: Administrative departments of various levels of tax authorities at the provincial level or below shall, in accordance with provisions, progressively establish income and tax files for each taxpayer (Article 4). Classification shall be made among various types of taxpayers, and corresponding basic information files shall be set up in accordance with the following categories: (1) employee taxpayers; (2) non-employee taxpayers; (3) shareholders and investors; (4) wholly individually-owned or partnership investors, family proprietors, and contractors or lessees of enterprises or institutions; and (5) foreign nationals (Article 5). The Measures require the establishment of a detailed withholding account system, dual filing system with tax authorities by taxpayers and withholding agents, and system of tax co-ordination among different government departments (Parts Three to Five). Tax authorities shall place the following persons under the category of key taxpayers: individuals from such high-income industries as finance, insurance, securities, power supply, telecommunications, petroleum, petrochemicals, tobacco, civil aviation, railways, real property, schools, hospitals, urban water supply and gas supply, publishing, highway administration, foreign-invested enterprises and foreign enterprises, high and new technology enterprises, intermediaries and sports clubs; such high-income individuals as private investors, actors or actresses of the entertainment industry, singers, sports stars and models; and performers who stay in China provisionally (Article 29). Administrative departments of various levels of tax authorities shall select a certain number of individuals within the following list as key taxpayers for special administration: (1) persons with relatively higher income; (2) persons who are relatively more famous; (3) persons with relatively more income source channels; (4) persons with relatively more income items; (5) freelancers with no fixed employer; and (6) persons having relatively greater influence on tax collection and administration (Article 30). Tax authorities shall also strengthen the administration on tax revenue sources and the full administration on all the individuals and all of their income (Parts Eight and Nine).
Related legislation: PRC Individual Income Tax Law (3rd Revision), Oct 27 2005 and PRC Administration of the Levy and Collection of Taxes Law (Revised), Apr 28 2001, CLP 2001 No.5 p.12 & CLP 1995 No.3 p.12