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Q:
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What is an annual individual income tax declaration?
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A:
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Accordingly to taxation regulations, after the end of 2020, resident individuals are required to file comprehensive income for the year. Comprehensive income includes salary, labor income, author’s remuneration and royalties. The filing computation is comprehensive income deducted by annual individual income tax threshold RMB60,000, other special deductible items, and other legitimate public welfare donations. The annual individual income tax payable amount is calculated as the product of this difference times applicable tax rate, then deducts the corresponding quick deduction factor minus prepaid amount.
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Q:
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When does an individual need to file annual individual income tax declaration?
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For resident individuals, annual individual income tax declaration is required as long as there is a difference between tax prepaid for the year and the tax payable amount calculated on the basis of comprehensive income. If the prepaid amount is higher, then a refund will be applicable. If the payable amount is higher, then individuals should file annual individual income tax declaration and repay the difference.
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Q:
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Under what cases, individuals can skip annual individual income tax declaration?
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For resident individuals, if the withholding agent has prepaid individual income tax accordingly throughout the year while met one of the following conditions:
Annual comprehensive income is less than RMB120,000;
The difference between tax payable and prepayments is less than RMB400;
The individual income tax prepaid amount is the same as comprehensive income payable amount;
Not wish to file refund.
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Q:
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What documents are needed for the filing?
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Vouchers or evidence for income, social insurance and house provident funds, special deduction items, other deductible items (annuity, qualified business health insurance or tax deferred pension insurance), donation, tax incentives, prepaid tax, as well as a bank card information for tax refund.
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Q:
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How to file annual individual income tax declaration for annual one-off bonus?
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If there is only one annual one-off bonus, it is allowed to be excluded from annual individual income tax declaration. If there is multiple annual one-off annual bonus declared, then only one of them can be excluded. Then rest shall be included in the comprehensive income.
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If the salary for December 2019 is paid in January 2020, does it count as part of the comprehensive income for 2020?
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Yes. Annual comprehensive income includes any income, deduction, qualified expenses or expenditure happened in 2020 on factual basis.
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