After the implementation of the new personal income tax law, the method of residents’ personal withholding and prepayment will be announced!

The State Administration of Taxation recently announced that in order to implement the newly revised "People's Republic of China Personal Income Tax Law", the following announcement will be made on the calculation method of the withholding agents to withhold and advance personal income tax on the individual wages, salary income, labor remuneration income, royalty income and royalty income of non-resident individuals after the full implementation of the new personal income tax law. The following announcement will come into effect on January 1, 2019.

State Administration of Taxation

Announcement on Several Issues in the Collection and Management Connection of the New Personal Income Tax Law

State Administration of Taxation Announcement No. 56 of 2018

Methods for individual resident withholding and prepayment

When the withholding agent pays the residents’ individual wages, salary income, labor remuneration income, royalty income, and royalty income, the withholding and prepayment of personal income tax in the following ways, and submits the Personal Income Tax Withholding Report Form to the competent tax authority (see Appendix 1).If the annual withholding and prepaid tax amount is inconsistent with the annual tax payable, the resident shall handle the annual comprehensive income settlement and settlement with the competent tax authority from March 1 to June 30 of the following year, and the tax will be refunded or compensated.

（1) When the withholding agent pays wages and salary income to the individual residents, the withholding tax shall be calculated according to the cumulative withholding method and shall handle the full withholding declaration for all employees on a monthly basis.The specific calculation formula is as follows:

• Taxes to be withheld in this period =（Cumulative withholding and prepaid taxable income ×Pre-deductible rate-quick calculation of deductions )-Cumulative tax reduction and exemption amount-cumulative tax withheld

• Cumulative withholding and prepaid taxable income =Cumulative income - cumulative tax-free income - cumulative deduction expenses - cumulative special deductions - cumulative special additional deductions - cumulative other deductions determined in accordance with the law

Among them: the cumulative deduction fee is 5,000 yuan /The month is calculated by multiplying by the number of months of employment that the taxpayer has been employed in the unit as of the year and this month.

In the above formula, calculate the withholding rate and quick calculation of the withholding tax amount of residents' personal wages and salary income, and follow the "Personal Income Tax Withholding Rate Table I" (See Appendix 2) to execute.

（2) The withholding agent shall pay the residents' personal labor remuneration income, royalty income, and royalty income, and withhold personal income tax on time or on a monthly basis.The specific methods of withholding and prepayment are as follows:

The income from labor remuneration, royalties, and royalties are the balance after deducting expenses.Among them, the amount of income from royalties is calculated at 70%.。

Deduct fees:If the income from labor remuneration, royalty income and royalty income does not exceed 4,000 yuan per time, the deduction fee shall be calculated at 800 yuan;If the income is more than 4,000 yuan per time, the deduction fee shall be calculated at 20%.

Taxable income:The income from labor remuneration, royalties, and royalties shall be based on each income as the withholding and prepaid taxable income.The excess progressive withholding rate of 20% to 40% is applicable to the income from labor remuneration (see Appendix 2 "Personal Income Tax Withholding Rate Table 2"), and the proportional withholding rate of 20% is applicable to the income from royalties and royalties.

• The tax amount of labor remuneration income should be withheld and prepaid =Withholding and prepaid taxable income ×Pre-deductible rate-quick calculation of deductions

• The tax amount should be withheld and prepaid for royalties =Withholding and prepaid taxable income ×20%

Non-resident individual withholding method

When the withholding agent pays wages, salary income, labor remuneration income, royalty income and royalty income to non-resident individuals, the personal income tax shall be withheld on a monthly basis or in the following ways:

The salary and salary income of non-resident individuals shall be taxable income based on the monthly income deducted from the expenses of RMB 5,000;The taxable income of labor remuneration, royalty income, and royalties shall be calculated based on the income per time as the taxable income, and the monthly tax rate table for non-resident individuals converted by month (see Appendix 2 "Personal Income Tax Rate Table III").Among them, the balance of income from labor remuneration, royalties, and royalties is reduced by 20% of the expenses.The amount of income from royalties is calculated at 70%.

Non-resident individual wages, salary income, labor remuneration income, royalty income,Taxable amount of royalties income =Taxable income ×Tax rate-quick calculation of deductions

This announcement shall come into effect on January 1, 2019

Original text and attachments of the notice:http://www.chinatax.gov.cn/n810341/n810755/c3954941/content.html