In accordance with relevant regulations of Individual Income Tax Law of the People’s Republic of China and its Implementation Regulations, Tax Collection and Administration Law of the People’s Republic of China and its Implementation Rules and other relevant regulations, the issues with respect to individual income tax annual reconciliation for comprehensive income in 2023 (hereinafter referred to as the “reconciliation”) are hereby announced as follows:

I. Contents of the Reconciliation

After the end of 2023, a resident individual (hereinafter referred to as a “taxpayer”) shall calculate the final tax payable by subtracting a quick calculation deduction from the value obtained by multiplying the total amount of four incomes, namely, wages and salaries, remuneration for personal services, author’s remuneration, and royalties obtained from January 1, 2023 to December 31, 2023, deducting the expenses of 60,000 yuan and special deductions, itemized deductions for specific expenditures, other deductions determined by law and eligible donations made to public welfare and charitable causes by the individual income tax rate for comprehensive income (see Annex 1 for the tax rate), and deduct the taxes that have been prepaid in 2023 from the final tax payable of the year to determine the amount of tax to be refunded or paid, and file tax returns with the tax authority and apply for tax refund or make a supplemental payment. The specific calculation formula is as follows:

The amount of tax to be refunded or paid = [(amount of comprehensive income – 60,000 yuan - “three social insurances and housing provident fund” and other special deductions - itemized deductions for specific expenditures on children’s education and other itemized deductions - other deductible items determined by law, - eligible donations made to public welfare and charitable causes) × applicable tax rate - quick calculation deduction] - amount of tax prepaid

The tax annual reconciliation return shall not involve income from leasing of assets and other classified income as well as incomes which are not included in the comprehensive income for the calculation of taxes payable as required by law.

II. Circumstances Where the Tax Annual Reconciliation is not Required 

A taxpayer having prepaid his or her individual income tax in 2023 in accordance with the law and falling under any of the following circumstances is not required to file the tax annual reconciliation return:

(1) The taxpayer needs to make a supplemental payment of tax upon the reconciliation but the annual comprehensive income does not exceed 120,000 yuan;

(2) The amount of taxes to be paid by the taxpayer upon the reconciliation does not exceed 400 yuan;

(3) The amount of taxes that have been prepaid by the taxpayer is the same as the amount of taxes payable upon the reconciliation;

(4) The taxpayer is eligible for tax refund upon the reconciliation but does not apply for tax refund.

III. Circumstances Where the Tax Annual Reconciliation is Required

A taxpayer falling under any of the following circumstances is required to file the tax annual reconciliation return:

(1) The amount of taxes that have been prepaid is larger than the amount of taxes payable upon the reconciliation, and the taxpayer applies for tax refund;

(2) The comprehensive income obtained in 2023 exceeds 120,000  yuan and the amount of taxes to be paid upon the reconciliation exceeds 400 yuan.

Where understatement of comprehensive income or failure to declare comprehensive income in 2023 is caused by any error in the application of income items or the withholding agent’s failure to perform the withholding obligation in accordance with the law, the taxpayer shall file the tax annual reconciliation return based on the amounts actually incurred in accordance with the law.

IV.Pre-tax Deductions

A taxpayer may apply for deduction or supplement deduction of the following pre-tax deductions incurred in 2023 during the reconciliation period:

(1) The subtracted expenses of 60,000 yuan and eligible special deductions such as basic pension insurance, basic medical insurance, unemployment insurance, and other social insurance premiums and housing provident funds;

(2) Eligible itemized deductions for specific expenditures on care of  children under the age of three, children’s education, continuing education, medical treatment  for serious illness, housing loan interest or housing rent, and supporting the elderly;

(3) Eligible enterprise annuities and occupational annuities, commercial health insurance, private pensions, and other deductions;

(4) Eligible expenditures of donations made to public welfare and charitable causes.

A taxpayer who has obtained both comprehensive income and business income may apply for subtracting the expenses of 60,000 yuan, special deductions, itemized deductions for specific expenditures, and other deductible items determined by law from comprehensive income or business income, but may not apply for the subtraction repeatedly.

Where a taxpayer declares jointly with his or her spouse the itemized deductions for specific expenditures on care of children under the age of three, children’s education, medical treatment for serious illness, or housing loan interest or housing rent, etc., or declares jointly with his or her brother or sister the itemized deductions for specific expenditures on supporting the elderly, he or she shall communicate with other personnel submitting such information about the amount of deduction to avoid submitting itemized deductions for specific expenditures in excess of the specified amount or proportion. Where a taxpayer’s submission of relevant information fails to meet the regulations, once it is found, the tax authority will give prompts and reminders through the individual income tax mobile APP, the website of electronic tax bureau for natural persons, the withholding agent, or other channels. In accordance with relevant regulations of Announcement of the Ministry of Finance and the State Taxation Administration on Policy Issues With Respect to the Individual Income Tax Annual Reconciliation for Comprehensive Income ([2019] No. 94), where a taxpayer refuses to take corrective actions or give explanations, the tax authority will suspend the taxpayer’s enjoyment of itemized deductions for specific expenditures. After the taxpayer corrects the relevant information or gives explanations as required, he or she may continue to enjoy itemized deductions for specific expenditures.

V. Time for Filing

The period for filing the tax annual reconciliation return for 2023 shall be from March 1 to June 30, 2024. If a taxpayer without a domicile in China depart the country before March 1, 2023, he or she may complete the reconciliation before departure.

VI. Methods of Filing

Taxpayers may choose the following filing methods as they like:

(1) They may file the tax annual reconciliation return by themselves.

(2) They may request their employers (including the institutions withholding and prepaying individual income tax on their income from remuneration for personal services based on the cumulative withholding method) to file the tax annual reconciliation return on their behalf.

Where a taxpayer requests a withholding agent to file the tax annual reconciliation return on his or her behalf, the employer shall accept the request, or train or direct the taxpayer to complete the reconciliation and apply for tax refund or make a supplemental payment of tax.

Where the institution files tax returns on behalf of the taxpayer, the taxpayer shall confirm in writing or by electronic means, etc., with the institution in advance, and provide supplementary information and documentation on the comprehensive income obtained from institutions other than the employer, relevant deductions, and tax preferences enjoyed, etc., in 2023 and be responsible for the authenticity, accuracy, and completeness of the information submitted. Where the taxpayer does not confirm with his or her employer to request the employer to file tax returns on his or her behalf, the institution shall not do so on his or her behalf.

(3) Where any party (including any tax-related professional service institution or any other institution or individual) is authorized to handle it, the taxpayer shall sign a written authorization with the authorized party.

The institution or the authorized individual shall, after completing the reconciliation for the taxpayer, inform him or her of the filing in a timely manner. If the taxpayer finds that there is any error in the filing of tax returns, he or she may request the institution or the authorized party to correct it or apply for correcting it by him- or herself.

VII. Means of Filing

For the purpose of facilitating taxpayers, tax authorities shall provide taxpayers with efficient and quick online channels for handling tax-related matters. Taxpayers may first choose to file their tax returns for the reconciliation through the individual income tax APP or website, and tax authorities shall provide taxpayers with the service of pre-filing of tax returns; and where it is not convenient to file tax returns through the above methods, taxpayers may also do so by mail or at the tax service halls.

To file his or her tax returns by mail, a taxpayer shall send the tax returns to the address announced by the tax administration of the province, autonomous region, municipality directly under the Central Government, or municipality with independent planning status where the tax authority in charge determined in accordance with Article 9 of this Announcement is located.

Where a taxpayer files tax returns for the reconciliation, the Annual Individual Income Tax Return for Self-filing (Annexes 2 and 3) shall be used. If the taxpayer needs to modify his or her own basic information or qualifies for any additional deduction or tax preference, he or she shall also fill in the form with the relevant information at the same time as all other required information and provide supporting materials as required. The taxpayer shall carefully check the information filled in and submitted to ensure that the information provided is true, accurate and complete.

Taxpayers and the employers filing tax returns for the reconciliation on behalf of taxpayers are required to retain all documentation on itemized deductions for specific expenditures and tax preferences and other documents for five years from the expiry date of the period for the tax annual reconciliation return.

The institutions providing equity (stock) incentives (including the equity incentives provided by domestic enterprises for employees with equities of overseas enterprises as subject matters) or cash rewards for the commercialization of job-related scientific and technological achievements or falling under other circumstances shall report or submit for the record in accordance with relevant regulations. At the same time, if a taxpayer obtains equity incentives for multiple times from the same institution within a tax year, the institution shall calculate the withheld taxes on a consolidated basis. A taxpayer obtaining equity incentives from different institutions within a tax year may provide relevant information on the equity incentives obtained from the previous institution to the current institution which shall calculate the withheld taxes on reconciliation, or file a tax annual reconciliation return with the tax authority by himself or herself from March 1 to June 30 of the next year.

IX. Tax Authorities that Accept the Filing of Tax Returns

Under the principles of convenience and proximity, where a taxpayer files a tax return by himself or herself or authorizes someone else to file on his or her behalf, the tax return shall be filed with the tax authority in charge at the place where his or her employers is located. Where there are two or more employers, the taxpayer may file a tax return with the tax authority in charge at the place where one of his or her employers is located.

Where there is no employer, the taxpayer shall file a tax return with the tax authority in charge in the locality of his or her household registration or at the place where his or her habitual residence is located, or at the place of  his or her main income source. “Place of  his or her main income source” refers to the place where the withholding agent paying the largest cumulative income from remuneration for personal services, author’s remuneration, or royalties of the taxpayer in 2023 is located.

Where an employer files a tax annual reconciliation return on behalf of a taxpayer, the tax return shall be filed with the tax authority in charge at the place where the employer is located.

For the purpose of facilitating tax services, and tax collection and administration, after the expiration of the period of the tax annual reconciliation, tax authorities will determine the tax authority in charge for the taxpayer having not filed a tax return for the reconciliation or having not filed a return of taxes on equity incentives obtained for multiple times.

X. Tax Refund and Supplementary Payment of Tax

(1) Application for Tax Refund

A taxpayer applying for tax refund upon filing a tax annual reconciliation return shall provide a qualified bank account opened within the territory of China. The tax authority shall, after examining the application, apply for refund of taxes from the State treasury in accordance with the relevant regulations on State treasury administration. If the taxpayer fails to provide his or her valid bank account, or there is any error in the information or materials provided, the tax authority shall notify the taxpayer to make a correction, and the taxpayer shall handle the tax refund after he or she makes the required corrections.

For the purpose of facilitating the application for tax refunds, a taxpayer whose annual comprehensive income in 2023 does not exceed 60,000 yuan and who has prepaid individual income tax may enjoy facilitated application for tax refund upon filing a tax return for the reconciliation through the simple tax return filing function provided by the individual income tax mobile APP or website.

Where a taxpayer applying for tax refund upon filing a tax annual reconciliation return for 2023 or any other tax refund fails to make supplementary payments of tax upon filing tax annual reconciliation returns for 2022 and previous years which he or she should have made, or fails to make corrections or give relevant explanations after being notified by the tax authority of any doubtful point in his or her annual tax return for 2022 and previous years, he or she may not apply for tax refund until he or she has made supplementary payments of tax upon filing tax annual reconciliation returns for 2022 and previous years, made the corrections or given relevant explanations.

(2) Application for Making Supplementary Payments of Tax

A taxpayer applying for making supplementary payments of tax upon filing a tax annual reconciliation return may make payments by means of online banking, POS at a tax service hall, a bank counter, or a non-bank payment institution, etc. If a taxpayer files his or her tax return by mail and needs to make supplementary payments of tax, he or she may track the filing and pay taxes in a timely manner through the individual income tax mobile APP or website or the tax service hall of the tax authority in charge.

Where a taxpayer required to make supplementary payments of tax upon filing a tax annual reconciliation return fails to apply for supplementary payments of tax or to make supplementary payments of tax in full after the expiration of the period of tax annual reconciliation, once it is found, the tax authority will order the taxpayer to take corrective actions during a specified period in accordance with laws and send relevant tax documents to the taxpayer. Where the Confirmation Letter on the Electronic Delivery of Tax Documents has been signed, documents shall be sent electronically through channels such as the individual income tax mobile APP and website; and where the Confirmation Letter on the Electronic Delivery of Tax Documents is not signed, documents shall be sent by other means. At the same time, tax authorities will surcharge for overdue payment in accordance with laws and mark it in the Individual Income Tax Payment Records of the taxpayer.

If taxes are over-refunded or underpaid upon filing a tax annual reconciliation return due to erroneous information, and the taxpayer makes corrections in a timely manner on his or her own initiative or after being reminded by the tax authority, the tax authority may exempt the taxpayer from punishment under the principle of “no punishment for first time violation.”

XI. Services for Tax Annual Reconciliation

Tax authorities shall launch a series of measures for optimizing services, strengthen policy interpretation and operation guidance for the filing of tax reconciliation, prepare guidelines for handling tax-related matters based on classification, explain the policy standards, professional terms and operating procedures in an easy-to-understand way, provide prompt and reminder services through multiple channels and in multiple forms, and provide tax-related consultation through the individual income tax mobile APP and website, 12366 Tax and Fee Payment Service Platform and other channels to help taxpayers solve difficult problems, and actively respond to their demands.

Before filing a tax annual reconciliation return, taxpayers may log into their individual income tax mobile APP or website to check their comprehensive income and tax payment information and basic information, such as bank card, individual identity information of those involved in itemized deductions for specific expenditures to make good preparation for the tax annual reconciliation.

For the purposes of guiding taxpayers in filing the tax annual reconciliation return in a reasonable and orderly manner and improving taxpayers’ filing experience, the tax authorities in charge shall notify and remind taxpayers to handle relevant matters during specified periods of time in batches and by stages. At the same time, tax authorities shall provide appointment-based services. Taxpayers who have the need for filing the tax annual reconciliation return in the early stage (March 1 to March 20) may, according to their own circumstances, log into the individual income tax mobile APP after February 21 to make an appointment for filing on any date during the above-mentioned period of time. From March 21 to June 30, taxpayers may file their tax returns at any time without appointment.

Tax authorities shall provide prioritized tax refund services for taxpayers who meet the requirements for tax refund upon filing the tax annual reconciliation return and have heavy living burdens. Upon request by taxpayers who have difficulty in independently filing their tax returns due to old age or mobility difficulties, etc., tax authorities may provide personalized services for the convenience of the people.

XII. Other Matters

In case of any discrepancy between Article 1 or Article 4  of Announcement of the State Taxation Administration on Issues With Respect to Individual Income Tax Self-filing ( [2018] No. 62) and this Announcement, this Announcement shall prevail.

In accordance with Announcement of the Ministry of Finance, the State Taxation Administration and the Ministry of Housing and Urban-Rural Development on Continuing the Implementation of the Relevant Individual Income Tax Policies for Supporting Residents in Purchasing New Houses after Selling Old Ones ([2023] No. 28), from January 1, 2024 to December 31, 2025, a taxpayer who purchases a new house in the same city within one year after selling his or her current house may apply for tax refund of  the individual income tax that has been paid on the sale of his or her current house in accordance with relevant regulations. Specific services and regulations on collection and administration shall be governed by Announcement of the State Taxation Administration on Tax Collection and Administration Matters With Respect to the Individual Income Tax Policies for Supporting Residents in Purchasing New Houses after Selling Old Ones ([2022] No. 21 ).

Annexes:

1. Individual Income Tax Rates (Applicable to Comprehensive Income)

2. Annual Individual Income Tax Return for Self-Filing (Form A, Summary Version, and Q&A Version)

3. Annual Individual Income Tax Return for Self-Filing (Form B)

State Taxation Administration

January 31, 2025