China’s IIT Special Additional Deductions from 2022
Recently, the State Council of the PRC released a Notice on the Establishment of Individual Income Tax Special Additional Deduction for Infants Nursing under 3 Years Old, which stipulates that the nursing expenses for children under 3 years old will be deducted from individual income tax (IIT) taxable income as special additional deductions, effective from 1 January 2022. There are only 6 categories special additional deductions can be deducted from IIT taxable income before.
The updated categories and deduction amount of IIT special additional deductions are as follows:
- Nursing Expenses for Children under 3 Years Old: RMB1,000/month for each child can be deducted.
- Children’s Education: RMB1,000/month for each child can be deducted.
- Continue Education:
(1)
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Academic (degree) education: RMB400/month up to 48 months can be deducted.
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(2)
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Skilled personnel or specialized technical professional qualification: RMB3,600 can be deducted in the year when the related certificate is obtained.
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- Medical Expenses for Serious Illness: Medical expenses exceeding RMB15,000 and borne by the individuals can be deducted based on actual basis during the annual IIT settlement period. The maximum amount is RMB80,000.
- Housing Loan Interest: RMB1,000/month up to 240 months can be deducted.
- Housing Rent:
(1)
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RMB1,500/month can be deducted in a municipality directly under the Central Government, a provincial capital, a city specifically designated in the State plan or any other city determined by the State Council.
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(2)
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RMB1,100/month can be deducted in other city with a registered population of more than 1 million; RMB800/month can be deducted in other city with a registered population of less than 1 million.
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- Expenses for Supporting the Elderly:
(1)
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RMB2,000/month can be deducted where the taxpayer is the only child.
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(2)
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Where the taxpayer is not the only child, the deduction shall be equally apportioned among the taxpayer and siblings. However, the apportionment shall not exceed RMB1,000/month.
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