Interim Measures for Special Additional Deductions for Individual Income Tax

个人所得税专项附加扣除暂行办法

Issued by State Council Document Guofa [2018] No. 41, December 22, 2018; effective January 1, 2019. Amended in 2022 (infant care deduction added, Guofa [2022] No. 8) and 2023 (deduction amounts raised, Guofa [2023] No. 13).

Sources:

• Chinese official text: State Taxation Administration Policy Database (fgk.chinatax.gov.cn)
• 2023 amendment: Guofa [2023] No. 13 (fgk.chinatax.gov.cn)
• English translation (2018 original): lawsdom.com

All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.

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Contents

• Chapter I — General Provisions (Articles 1–4)
• Chapter II — Children's Education (Articles 5–7)
• Chapter III — Continuing Education (Articles 8–10)
• Chapter IV — Medical Treatment of Serious Illness (Articles 11–13)
• Chapter V — Housing Loan Interest (Articles 14–16)
• Chapter VI — Housing Rent (Articles 17–21)
• Chapter VII — Elderly Support (Articles 22–23)
• Chapter VII-A — Care of Children Under Three (2022 Addition)
• Chapter VIII — Safeguard Measures (Articles 24–28)
• Chapter IX — Supplementary Provisions (Articles 29–32)

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Chapter I — General Provisions

Article 1

The Interim Measures for Special Additional Deductions for Individual Income Tax (the "Measures") are hereby formulated in accordance with the Individual Income Tax Law of the People's Republic of China (the "IIT Law").

Article 2

For the purpose of the Measures, the special additional deductions for individual income tax refer to seven types of deductions: children's education, continuing education, medical treatment for serious illness, housing loan interest or housing rent, elderly support, and care of children under three, as provided in the IIT Law.

Article 3

The special additional deductions for individual income tax shall be carried out in line with the principles of fairness, reasonableness, convenience, alleviating burdens on taxpayers and improving people's livelihood.

Article 4

The scope of and standard for the special additional deductions shall be adjusted promptly in light of changes to expenses for people's livelihood such as education, medical treatment, housing and elderly care expenses.

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Chapter II — Children's Education

Article 5

Expenses for full-time academic education of children of a taxpayer shall be deducted at the standard amount of RMB 2,000 per child per month.

The academic education includes compulsory education (primary school and junior middle school education), senior high school education (general senior secondary school, secondary vocational education, and technical education) and higher education (junior college, undergraduate, postgraduate and doctoral education).

Expenses for pre-school education from the age of three to primary school enrollment shall be implemented in accordance with the provisions of the preceding paragraph.

Article 6

The deduction for children's education may be allocated as 100% for one parent, or 50% each for both parents. The specific allocation method may not be changed within one taxable year.

Article 7

If the children of a taxpayer receive education abroad, the taxpayer shall keep the overseas school's admission notice, study visa and other relevant education certificates for future reference.

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Chapter III — Continuing Education

Article 8

Expenses for continuing domestic academic (degree) education of a taxpayer shall be deducted at the amount of RMB 400 per month during the academic (degree) education period. The deduction period for the same continuing academic (degree) education shall not exceed 48 months. Expenses for continuing education of professional qualifications of skilled personnel or professional qualifications of specialized technicians shall be deducted at RMB 3,600 per year in the year when the relevant certificate is obtained.

Article 9

Where an individual receives continuing academic (degree) education of bachelor degree or below, meeting the deduction conditions specified under the Measures, the education expenses may be deducted from the taxable income of the parents (as children's education) or from the taxable income of the individual (as continuing education).

Article 10

The taxpayer who receives continuing education of professional qualifications shall keep the relevant certificate for future reference.

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Chapter IV — Medical Treatment of Serious Illness

Article 11

Within a taxable year, the part exceeding RMB 15,000 of the accumulated medical expenses of an individual related to basic medical insurance, after deduction of medical insurance reimbursement (the part of self-payment within the scope of the medical insurance catalog), shall be deducted against actual payment within the limit of RMB 80,000 when the taxpayer files the annual tax reconciliation return.

Article 12

The medical expenses incurred by a taxpayer may be deducted by the taxpayer himself/herself or his/her spouse; the medical expenses incurred by a minor child may be deducted by his/her father or mother.

For medical expenses incurred by a taxpayer, his/her spouse or minor children, the deductions shall be calculated separately in accordance with the provisions of Article 11 of the Measures.

Article 13

The taxpayer shall keep the original (or photocopy) of medical service charges and the medical insurance reimbursement receipts for future reference. The medical security department shall provide the patient with an annual medical fee information inquiry service recorded in the medical security information system.

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Chapter V — Housing Loan Interest

Article 14

Where a taxpayer or his/her spouse purchases the first house in China using an individual housing loan from a commercial bank or housing provident fund, the first housing mortgage interest may be deducted at the standard amount of RMB 1,000 per month during the loan repayment term. The deduction period shall not exceed 240 months. A taxpayer may only enjoy the deduction of housing mortgage interest for the first house once.

For the purpose of the Measures, the first housing mortgage refers to the housing mortgage that enjoys the first housing mortgage interest rate.

Article 15

Upon agreement by a couple, the housing mortgage interest may be deducted from the taxable income of one party. The specific deduction method shall not be changed within one taxable year.

For a couple who each purchased a first house before marriage, the mortgage interest may be deducted as 100% for one spouse's house, or 50% each for both spouses' respective houses. The specific deduction method shall not be changed within one taxable year.

Article 16

A taxpayer shall keep his/her housing mortgage contract and loan repayment vouchers for future reference.

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Chapter VI — Housing Rent

Article 17

Where a taxpayer does not have a house in his/her main work city, housing rent paid for a rented house in the main work city may be deducted at the following standard amounts:

1. Where the rented house is located in a municipality directly under the Central Government, a provincial capital, a city specifically designated in the State plan, or any other city determined by the State Council: RMB 1,500 per month;

2. Where the rented house is located in any other city with a registered population within municipal districts of more than 1 million: RMB 1,100 per month;

3. Where the rented house is located in any other city with a registered population within municipal districts of not more than 1 million: RMB 800 per month.

Where the taxpayer's spouse has his/her own house in the taxpayer's main working city, the taxpayer shall be deemed to have his/her own house in the main working city.

The registered population of the municipal district shall be subject to data published by the National Bureau of Statistics.

Article 18

For the purpose of the Measures, the main work city refers to all administrative areas of municipalities directly under the Central Government, cities specifically designated in the State plan, sub-provincial cities and prefecture-level cities (prefectures, autonomous prefectures and leagues) where a taxpayer is employed, or the city that receives the annual tax reconciliation return if the taxpayer is not employed by any entity.

Where a couple works in the same main work city, the housing rent shall be deducted for one party only.

Article 19

The housing rent shall be deducted by the tenant who has concluded the housing rental contract.

Article 20

A taxpayer and his/her spouse may not simultaneously enjoy the special additional deduction for housing mortgage interest and the special additional deduction for housing rent in the same taxable year.

Article 21

A taxpayer shall keep the housing rental contract, agreement or any other relevant documents for future reference.

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Chapter VII — Elderly Support

Article 22

Elderly support expenses paid by a taxpayer for supporting one or more dependents may be deducted at the following standard amounts:

1. Where a taxpayer is an only child: deduction at the standard amount of RMB 3,000 per month;

2. Where a taxpayer is not an only child: the monthly deduction amount of RMB 3,000 shall be apportioned among the taxpayer and his/her siblings. The amount apportioned to each person shall not exceed RMB 1,500 per month. The apportionment may be equal, by agreement, or designated by the dependent. Where a designated or agreed apportionment is adopted, a written apportionment agreement shall be signed. Where the designated apportionment is inconsistent with the agreed apportionment, the designated apportionment shall prevail. The specific apportionment method and amount shall not be changed within one taxable year.

Article 23

For the purpose of the Measures, dependents refer to parents aged 60 or above, as well as grandparents or maternal grandparents aged 60 or above whose children have all passed away.

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Chapter VII-A — Care of Children Under Three

From the date on which an infant is born until the month before the infant reaches three years of age, the taxpayer may deduct the care expenses at the standard amount of RMB 2,000 per infant per month.

The deduction may be allocated as 100% for one parent, or 50% each for both parents. The specific allocation method may not be changed within one taxable year.

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Chapter VIII — Safeguard Measures

Article 24

Where a taxpayer requests an invoice, financial receipt, or payment voucher from a payee, the payee shall not refuse.

Article 25

Where a taxpayer enjoys the special additional deductions for the first time, he/she shall submit relevant information to the withholding agent or tax authority. The withholding agent shall submit relevant information to the tax authority in a timely manner, and the taxpayer shall be responsible for the truthfulness, accuracy and completeness of the submitted information. In case of a change in the information related to the special additional deductions, the taxpayer shall provide the withholding agent or tax authority with the updated information in a timely manner.

The information specified in the preceding paragraph includes the personal identity information of a taxpayer, his/her spouse, any minor children, any elderly dependents and others if applicable, as well as any other information related to the special additional deductions as stipulated by the taxation department of the State Council.

Article 26

Relevant departments and entities shall provide the tax department with or assist it in verifying the following information related to the special additional deductions:

1. Public security department: identity information, household registration information, entry and exit document information, overseas study information, death records of household members, and other information;

2. Health department: medical birth certificate information and only-child status information;

3. Civil affairs department, foreign affairs department, or the Supreme People's Court: marriage registration information;

4. Education department: school enrollment information (including enrollment information and examination information for continuing academic education), or qualification information of overseas education institutions filed with the relevant department;

5. Department of human resources and social security or other related departments: school enrollment information for technical school students, continuing education information for professional qualifications of skilled personnel or specialized technicians;

6. Housing and urban-rural development department: housing (including public rental housing) rental information; housing provident fund authority: information on repayment of housing provident fund loans;

7. Department of natural resources: real estate registration information;

8. People's Bank of China or financial regulatory department: information on repayment of commercial housing loans;

9. Medical security department: information on medical expenses paid by individuals recorded in the medical security information system; and

10. Any other tax-relevant information identified by the taxation department of the State Council.

The format, standard and method of sharing the aforesaid data and information shall be determined by the taxation department of the State Council and provincial tax authorities upon consultation with the relevant departments.

Where any relevant department or entity has information related to the special additional deductions but refuses to provide it to a tax department, the person in charge and other responsible persons shall be held liable.

Article 27

Where a withholding agent finds that a taxpayer has submitted false information, it may require the taxpayer to make corrections; if the taxpayer refuses to do so, the withholding agent shall notify the tax authority for timely processing.

Article 28

Where a tax authority audits the special additional deductions, the relevant departments and individuals — such as the police station, the residents' committee or the villagers' committee of the place of the employer, the place of residence and the household registration place of the taxpayer — shall provide assistance.

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Chapter IX — Supplementary Provisions

Article 29

For the purpose of the Measures, parents refer to biological parents, stepparents and adoptive parents. Children refer to children born inside and outside marriage, stepchildren and adopted children. Where any person other than parents acts as the guardian of a minor, the Measures shall apply mutatis mutandis.

Article 30

The amount of special additional deductions that is not fully deducted within a taxable year shall not be carried forward to subsequent years.

Article 31

The specific operational measures for the special additional deductions shall be separately formulated by the taxation department of the State Council.

Article 32

The Measures shall come into effect as of January 1, 2019.

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Summary of Deduction Standards (as of 2023)

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Source: English translation based on lawsdom.com (2018 original text); amendments translated by editors from Chinese official sources on fgk.chinatax.gov.cn. All amounts reflect the 2023 increases per Guofa [2023] No. 13, effective January 1, 2023.