Save Money Now! You May Get Tax Refund after Doing This!

Save Money Now! You May Get Tax Refund after Doing This!

The final settlements and payments of IIT for the year 2020 begin. This year, the whole procedures have been further simplified. If you are still not clear about the IIT settlement, check our article to know more! 
Save Money Now! You May Get Tax Refund after Doing This!
On Feb 8, 2020, China’s State Taxation Administration (STA) released the Announcement of the Final Settlements and Payments of Individual Income Tax on the Annual Comprehensive Income in 2020
 
Save Money Now! You May Get Tax Refund after Doing This!
 
Taxpayers need to calculate their annual IIT payable, then deduct their prepayment to get the annual amount of the tax refund or payment and make a declaration to the authorities. 
 

To know more about the individual income tax, please check our previous articles Save Money Now! You May Get Tax Refund after Doing This! 

 
WHAT’S IIT SETTLEMENT? 
 
According to the announcement, taxpayers are required to make a settlement during the period between March 1 and June 30
 
They need to calculate their annual IIT payable, then deduct their prepayment to get the annual amount of the tax refund or payment and make a declaration to the authorities. 
 
In other words, if your IIT prepayment exceeds your actual IIT payable for the whole year, you can get a refund; otherwise, you need to pay the unpaid tax to settle. 
 

Save Money Now! You May Get Tax Refund after Doing This!

© Image | GOOGLE
 
SHOULD I SETTLE? 
 
Generally, all taxpayers are required to make the settlement as long as their prepayment is not equal to their tax payable. 
 
However, the government has issued a list of exemptions. Those who meet any of the following conditions don’t need to settle to lower the tax burden: 
 
  • Need to pay the tax but the annual comprehensive income is less than 120,000 yuan; 
  • Need to pay the tax but the tax payable is less than 400 yuan; 
  • The prepayment is equal to the annual tax payable, or you don’t apply for the refund. 
 
HOW TO CALCULATE? 
 
Well first, you need to get clear your annual comprehensive income, including: 
 
  • Employment income 
  • Remuneration for personal services 
  • Author’s remuneration 
  • Royalties
Then deduct the standard basic deduction (60,000 yuan), specific deductions, additional deductions, and charitable contributions to get the taxable income. 
 
Save Money Now! You May Get Tax Refund after Doing This!
 
After the multiplication by an applicable tax rate and deduction of the quick deduction, you’ll get the annual IIT payable. 
 

Save Money Now! You May Get Tax Refund after Doing This!

© Image | china-briefing

The tax refund or the tax payment is the difference between your annual tax payable and the tax prepayment. 
 
 
WHEN TO DO IT? 
 
Taxpayers need to make the annual settlement for 2020 during the period between March 1 and June 30, 2021. 
 
For those who have no domicile in China and will leave the country before March 1, 2021, they can settle the tax before departure.
 
Save Money Now! You May Get Tax Refund after Doing This!
WHAT IF I DON’T DO IT? 
 
As we said above, the settlement makes you pay the individual income tax your actually need to pay. 
 
If you fail to make a tax settlement while you’re required, apparently, that’s tax evasion. And your tax credit will be affected. 
 
In serious cases, violators are not allowed to leave China, and get fined even go to jail. 
 
Related article: Banned Leaving China for Violating These! 
 
Save Money Now! You May Get Tax Refund after Doing This!
If you have any questions about doing business or tax payments in China, please feel free to contact HACOS

Save Money Now! You May Get Tax Refund after Doing This!

In order to help you reach the latest update on the global pandemic situation, HACOS has set a quick link on the menu of our WeChat page. Follow us, you can check it whenever you want! 

 

Save Money Now! You May Get Tax Refund after Doing This!

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Save Money Now! You May Get Tax Refund after Doing This!

SOURCE | Shanghai Administration of Foreign Experts Affairs

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Save Money Now! You May Get Tax Refund after Doing This!Save Money Now! You May Get Tax Refund after Doing This!