In the News: China Raises Individual Income Tax Threshold; Introduces New E-commerce Law

September 03, 2018 | BY

Jacelyn Johnson

China approves reform to Individual Income Tax Law and introduces the much-awaited E-commerce Law; both will take effect from January 1, 2019.

China Passes New Individual Income Tax Law

The Standing Committee of the National People's Congress (NPC) passed the amendments to the PRC Individual Income Tax Law on August 31. The new law will become effective on January 1, 2019.

The reform introduces a new statutory length of residence rule for non-Chinese residents changing the current 365-day consecutive residence requirement to 183 days.

The new law increased minimum threshold for personal income tax from Rmb3,500 to Rmb5,000 per month, or Rmb60,000 per year. The new law also introduces the idea of “comprehensive income” which would include wage and salary, and other remuneration for labor services including author's remuneration and royalties. This new taxation threshold will take effect as early as October 1.

Among the other reforms adopted are itemized deductions on special expenses like education, healthcare, family support as well as housing loan interest and rent.

China Approves New E-commerce Law

In a latest progressive move from China, the Standing Committee of the National People's Congress (NPC) introduced the long-awaited PRC E-commerce law on August 31.

The new legislation will regulate all e-commerce activities in China, which includes the operations and behaviors of e-commerce platforms and online merchants. The new law imposes liability on platform operators, requiring them to maintain fair competition and to protect consumer interest.

The new law, which will come in force on January 1, 2019 will see a new era of change in the legal landscape of the way online businesses in China operates. The E-commerce Law, when in force, would effectively regulate and protect intellectual property rights, consumer rights as well as cybersecurity and personal data.

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