China: 2022 Tax Changes and Maternity Leave Extension

January 25, 2022
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Extension of Preferential Individual Income Tax Policies for Expatriates

To reduce the burden of personal tax income, the State Council has decided to extend preferential individual income tax (IIT) policies for foreigners until the end of 2023. Foreigners living in China holding work visas enjoy a reduction in their IIT for fees going towards categories like Housing Rental, School Fees for Children, Language Training, and Business Travel.

These tax benefits were due to expire at the end of 2021. However, they have now been extended till 31 December 2023.

Extension of Preferential Individual Income Tax Policies for Annual One-off Bonus

The annual one-off bonus will not be incorporated into the salary income of the current month, and the implementation of the policy of separate monthly taxation will be extended to the end of 2023.

For more details:

Shanghai and Beijing Increase Maternity Leave by 30 Days

Female employees’ entitlement to extend maternity leave will be increased from 30 to 60 days. Maternity leave is increased to 158 calendar days for both cities for births on or after 26 November 2021 in Beijing and 25 November 2021 in Shanghai.

Extended Tax Cuts for Enterprises in Covid-19 Affected Sectors

China will extend the tax and fee cut measures that expired at the end of 2021 to continue supporting small enterprises and individually-owned businesses.

Measures include improving the enhanced tax deduction policy for R&D expenses, increasing VAT refunds for excess input VAT credits, and promoting technological innovation in manufacturing enterprises.

Source: Links International

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