Individual Income Tax Exemptions in China (2025)

Common Individual Income Tax Exemptions (Verify with Tax Authorities):

• Basic Deduction: A standard basic deduction is applied to salary income. The amount of this deduction is subject to change.
  It is essential to verify the current deduction amount with the tax authorities. The amount you mentioned (CNY 5,000) may be outdated.
• Insurance Compensation: Compensation received from insurance companies (e.g., for medical expenses or property damage) is generally tax-exempt.
  Specific rules and limitations may apply.
• Severance Pay: Severance pay received in accordance with Chinese labor laws is usually tax-exempt, but there might be limitations or specific calculation rules.
  Consult the relevant regulations for details.
• Government Subsidies: Lawfully received government subsidies may be exempt from individual income tax.
  However, the specific types of subsidies that qualify for exemption should be confirmed with the tax authorities.
• Pensions and Survivor Benefits: Pensions received from work-related pension plans and survivor benefits are typically tax-exempt.
  Specific rules and regulations apply to pension income.
• Government Prizes: Prizes awarded by the government for achievements in sports, education, science, or other fields may be tax-exempt.
  The specific conditions for this exemption should be confirmed with the tax authorities.
• Interest Income (Limited): Interest income from bank deposits and government bonds may be exempt up to a certain limit.
  The specific exemptions and any applicable limits should be verified with the tax authorities, as these can change.
• Capital Gains (Specific Situations): Capital gains from the sale of a primary private dwelling held for a certain period may be exempt.
  The specific holding period and other conditions for this exemption should be verified with the tax authorities.
  The 5-year holding period you mentioned may be outdated.
• Dividends (Specific Situations): Dividends received by a resident individual from a resident company may be exempt under certain conditions.
  The specific rules and any limitations should be confirmed with the tax authorities.

Key Updates and Considerations:

• Tax Laws are Subject to Change: Chinese tax laws and regulations are subject to frequent updates and amendments.
  It is crucial to verify the latest information with a qualified tax advisor or by consulting official Chinese tax sources.
• Professional Advice: Individual income tax rules can be complex.
  It is highly recommended to seek professional advice from a tax specialist experienced in Chinese tax law for specific guidance on your situation.
• Documentation: Maintain proper documentation to support any claimed exemptions.

Where to Find Up-to-Date Information:

• State Taxation Administration (STA): The STA is the primary source for official tax information in China. Their website is an essential resource.
• Local Tax Bureaus: Local tax bureaus administer individual income tax within their respective jurisdictions.
• Reputable Tax and Legal Firms: Consulting firms specializing in Chinese tax law can provide expert guidance.