Decree [1999] No.272 of the State Council September 30, 1999

Article 1 These Measures are formulated in accordance with the provision of Article 12 of the Individual Income Tax Law of the People¡¦s Republic of China.

Article 2 The individuals gaining income from savings deposit interest of Renminbi and foreign currency from savings institutions in the People's Republic of China shall pay individual income tax according to these Measures.

Article 3 The criterion of collection to individual income tax to the income of savings deposit interest is the savings deposit interest of Renminbi and foreign currency gained by taxpayers.

Article 4 The collection to individual income to savings deposit interest shall apply proportional tax rate of 20 percent.

Article 5 The income of savings deposit interest of education gained by individuals and other specific savings deposit defined by financial department under the State Council or the income from specific foundation deposit interest with the savings quality shall exempt from collection of individual income tax.

The education savings related by the preceding clause mean individuals open accounts in authorized banks in accordance with the relevant provisions of the state and deposit standard amount of fund, and use them only for the aim of education.

Article 6 The collection of individual income tax to the income of savings deposit interest shall be computed and collected based on the income from interest every time.

Article 7 The collection of individual income tax to the income of savings deposit interest shall take the savings institutions paying interest as withholding agents and execute withholding and remitting.

Article 8 Where a withholding agents pay interest to depositors or handle the business of automatic transfer deposit of savings deposit, withholding agents withhold and remit tax payments according to law.

Where withholding agents withhold tax payments, they shall make a mark on the interest documents given to depositors.

Article 9 Withholding agents shall bring the tax payments deducted every month into the central exchequer within 7 days next month and file report list of withholding and remitting tax payments to local competent tax authorities; where the deducted tax payments are foreign currency, withholding agents shall convert them into Renminbi in accordance with the base Renminbi exchange rate of the last day of the previous month ahead of payments quoted by People's Bank of China and bring them into the central exchequer in Renminbi.

Article 10 2 percent commission is given to withholding agents based on deducted tax payments.

Articled 11 Tax authorities shall strengthen control and check to the situation of withholding and remitting tax payments of withholding agents. Withholding agents shall cooperate actively with tax authorities, and report the situation accurately, and provide all relevant information. They may not refuse to cooperate and may not conceal the facts.

Article 12 The collection of individual income tax to the income of savings deposit interest shall be collected and managed by State Tax Bureau in accordance with the Law of the People's Republic of China on the Administration of Tax Collection and Individual Income Tax Law of the People's Republic of China.

Article 13 The savings institutions called by these Measures mean the institutions, such as commercial banks, urban credit cooperatives, credit cooperatives in rural areas handling savings business approved by People's Bank of China and it's branches and the institution such as postal enterprises handling savings business in accordance with law.

Article 14 The income from interest fruited by savings deposit before October 31, 1999 shall be exempted from individual income tax; where the income of interest is fruited by the savings deposit after November 1, 1999, individual income tax shall be collected according to these Measures.

Article 15 These measures shall enter into effect as of November 1, 1999.

Promulgated by The State Council on 1999-9-30