1. Subsidies and allowances not in the nature of wages and salaries

? ? ? ? Relevant laws and regulations:

? ? ? ? The Notice of the State Administration of Taxation on Printing and Distributing the Provisions on Several Issues Concerning the Collection of Individual Income Tax (GSF [1994] No. 089) stipulates that:

? ? ? ? The following subsidies and allowances that do not belong to the nature of wages and salaries or the income that does not belong to the income items of the taxpayer’s own wages and salaries are not taxable:

? ? ? ? Only child allowance; Child care allowance; Travel allowance and meal allowance.

? ? ? ? The Notice of the Ministry of Finance and the State Administration of Taxation on the Determination of the Scope of Meal Allowance (Cai Shui Zi [1995] No. 82) stipulates that:

? ? ? ? According to the regulations of the financial department, if an individual works in the urban and suburban areas on business and cannot work in the work unit or return to eat, and really needs to eat outside, the individual income tax will not be levied on the delayed meal fee collected according to the actual number of delayed meals and the prescribed standard. Subsidies and allowances issued to employees in the name of meal allowance by some units should be included in the current month’s wages and salaries for personal income tax.

2. A certain standard of official expenses can be deducted from the income of official vehicles and communication subsidies

? ? ? ? The deduction standard of official expenses shall be determined by the provincial local tax bureau according to the actual situation of the taxpayer’s official transportation and communication expenses, and reported to the provincial people’s government for approval, and then reported to the State Administration of Taxation for the record.

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the Notice of the State Administration of Taxation on Policies Related to Individual Income Tax (GSF [1999] No. 58):

? ? ? ? The official vehicle and communication subsidy income obtained by individuals due to the reform of the official vehicle and communication system, after deducting a certain standard of official expenses, is calculated and withheld according to the income item of “wages and salaries”.
3. Welfare expenses (living allowance) are tax-free

? ? ? ? In Article 4 of the Individual Income Tax Law, the term “welfare expenses”, which can be exempted from tax, refers to the living subsidies paid to individuals from the welfare expenses retained by enterprises, public institutions, state organs and social organizations or trade union funds in accordance with the relevant provisions of the State.

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the Notice of the State Administration of Taxation on the Determination of the Scope of Subsidies (GSF [1998] No. 155):

? ? ? ? The subsistence allowance refers to the temporary subsistence allowance paid to the taxpayer or his family from the retained welfare or labor union funds according to the state regulations due to certain specific events or reasons that cause certain difficulties in the normal life of the taxpayer or his family.
4. Relief and pension exemption

? ? ? ? Relevant laws and regulations:

? ? ? ? According to Item 4, Article 4 of the Individual Income Tax Law:

? ? ? ? The relief fund and pension are exempt from individual income tax.

? ? ? ? Article 14 of the Regulations for the Implementation of the Individual Income Tax Law of the People’s Republic of China:

? ? ? ? The term “relief fund” refers to the subsidies paid by the civil affairs departments of the people’s governments at all levels to individuals for living difficulties.
5. Exemption of work-related injury insurance benefits

? ? ? ? Work-related injury insurance benefits, including one-time disability allowance, disability allowance, one-time work-related injury medical subsidy, one-time disability employment subsidy, work-related injury medical treatment, inpatient food allowance, transportation and accommodation expenses for medical treatment in other places, work-related injury rehabilitation expenses, auxiliary equipment expenses, living care expenses, etc., which are obtained by work-related injury employees in accordance with the provisions of the Regulations on Work-related Injury Insurance, as well as the death of employees due to work, The funeral allowance, pension for supporting relatives and one-time work-related death allowance obtained by their close relatives in accordance with the Regulations on Work-related Injury Insurance. “

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the Notice of the Ministry of Finance and the State Administration of Taxation on Individual Income Tax Policies Related to Industrial Injury Insurance Benefits Obtained by Workers with Industrial Injury (CS [2012] No. 40):

? ? ? ? “I. The industrial injury insurance benefits obtained by the workers and their close relatives in accordance with the Regulations on Industrial Injury Insurance (Order No. 586 of the State Council) are exempt from individual income tax.
6. Tax exemption of “three insurances and one fund” paid by units and individuals

? ? ? ? According to the provisions of CS [2006] No. 10:

? ? ? ? The basic endowment insurance premiums, basic medical insurance premiums and unemployment insurance premiums actually paid by enterprises and institutions in accordance with the regulations are exempt from individual income tax; The basic endowment insurance premium, basic medical insurance premium and unemployment insurance premium paid by individuals in accordance with regulations are allowed to be deducted from the taxable income of individuals.

? ? ? ? Units and individuals are allowed to deduct their actual housing accumulation fund from their taxable income within the range of 12% of their average monthly salary of the previous year.
7. Tax exemption for “three insurances and one fund” withdrawn by individuals

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the provisions of CS [2006] No. 10:

? ? ? ? Individual income tax is exempted when individuals actually receive (draw) the original basic endowment insurance, basic medical insurance, unemployment insurance and housing accumulation fund.
8. Maternity allowance exemption

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the Notice of the Ministry of Finance and the State Administration of Taxation on Individual Income Tax Policies Related to Maternity Allowance and Maternity Medical Expenses (CS [2008] No. 8):

? ? ? ? Maternity allowance, maternity medical expenses or other allowances and subsidies of the nature of maternity insurance obtained by women giving birth in accordance with the maternity insurance measures formulated by the people’s government at or above the county level in accordance with the relevant provisions of the State are exempt from individual income tax.
9. Tax exemption for subsidies and allowances issued in accordance with uniform national regulations

? ? ? ? Relevant laws and regulations:

? ? ? ? Article 13 of the Regulations for the Implementation of the Individual Income Tax Law of the People’s Republic of China stipulates that:

? ? ? ? Subsidies and allowances issued in accordance with the uniform provisions of the State refer to government special allowances, academician allowances, senior academician allowances and other subsidies and allowances exempted from individual income tax as stipulated by the State Council.
10. Tax exemption for retirement and retirement expenses

? ? ? ? Relevant laws and regulations:

? ? ? ? According to Article 4 of the Individual Income Tax Law of the People’s Republic of China:

? ? ? ? Tax exemption. Specific provisions: Individual income tax shall be exempted from the settlement fee, retirement fee, basic pension or retirement fee, retirement fee and retirement living allowance paid to cadres and employees in accordance with the uniform provisions of the State;
11. The subsidies obtained by senior experts who extend the retirement age from their units are exempt from tax

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the Notice of the Ministry of Finance and the State Administration of Taxation on Several Policy Issues of Individual Income Tax (CS Zi [1994] No. 20):

? ? ? ? For senior experts (experts, scholars and academicians of the Chinese Academy of Sciences and the CAE Member who have reached the retirement age but have properly extended the retirement age due to work needs), their income from wages and salaries during the extended retirement period shall be regarded as retirement wages and retirement wages exempted from individual income tax.
12. 50% reduction in cash reward for job conversion of scientific and technological personnel

? ? ? ? Relevant laws and regulations:

? ? ? ? CS [2018] No. 58 stipulates:

? ? ? ? According to the provisions of the Law of the People’s Republic of China on Promoting the Transformation of Scientific and Technological Achievements, non-profit research and development institutions and institutions of higher learning approved to be established in accordance with the law, cash rewards given to scientific and technological personnel from the income from the transformation of professional scientific and technological achievements can be reduced by 50% to be included in the “salary and salary income” of scientific and technological personnel of the current month, and individual income tax shall be paid according to the law.
13. No tax will be levied on equity awards of scientific and technological personnel temporarily

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the provisions of GSF [1999] No. 125:

? ? ? ? Scientific research institutions and institutions of higher learning will give individual rewards to scientific and technological personnel in the form of shares or proportion of investment in the transformation of scientific and technological achievements. After the examination and approval of the competent tax authority, the individual income tax will not be levied temporarily.

14. Tax exemption for salaries and allowances paid by the Asian Development Bank

? ? ? ? Relevant laws and regulations:

? ? ? ? CS [2007] No. 93:

? ? ? ? For the salaries and allowances paid by the Asian Development Bank to Chinese citizens or nationals (including experts performing tasks for the ADB), those who are confirmed by the Asian Development Bank to be employees of the ADB or experts performing projects, the relevant salaries and allowances obtained by them in accordance with the provisions of the tax law of China shall be exempted from individual income tax;
15. Tax exemption for transfer fee, demobilization fee and retirement payment of military personnel

? ? ? ? Relevant laws and regulations:

? ? ? ? Article 4 of the Individual Income Tax Law provides for tax exemption:

? ? ? ? Item 6: transfer fee, demobilization fee and retirement payment for servicemen;
16. Thirteen military subsidies

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the Notice of the Ministry of Finance and the State Administration of Taxation on the Levy of Individual Income Tax on the Wages and Salaries of Military Cadres (CS Zi [1996] No. 14):

? ? ? ? (1) Government special allowance; Welfare subsidies; Subsidy for separation of husband and wife; The military family members have no allowance for working and living difficulties; Health care expenses for the only child; Child care and education subsidy; Public service fee (nanny fee) for cadres at or above the military level; Military grain price difference subsidies are tax-exempt items for military cadres or subsidies and allowances that do not belong to their own income, and do not need to pay individual income tax.

? ? ? ? (2) There are five subsidies and allowances that are not taxable temporarily: military occupation allowance; Subsidy for hardship areas established by the army; Professional subsidies; Post allowance for grass-roots officers (post allowance for platoon leaders of battalion and company); Food allowance.
17. Tax exemption for one-time retirement pension and one-time economic subsidy of retired soldiers

? ? ? ? Relevant laws and regulations:

? ? ? ? The Regulations on the Placement of Retired Soldiers (Order No. 608 of the State Council of the People’s Republic of China and the Central Military Commission of the People’s Republic of China) stipulates that:

? ? ? ? For retired soldiers who are self-employed, the army will issue a one-time retirement payment, which will be specially arranged by the central finance; Local people’s governments may give economic subsidies according to local actual conditions. The standards and distribution methods of economic subsidies shall be stipulated by the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government. One-time retirement pension and one-time economic subsidy are exempt from individual income tax according to national regulations.
18. Board expenses of ocean-going crew

? ? ? ? Relevant laws and regulations:

? ? ? ? Guo Shui Fa [1999] No. 202 stipulates that:

? ? ? ? Since the board expenses of crew members are used for group meals and are not distributed to individuals, this allowance is allowed to be excluded from the taxable wages and salaries of individual crew members.
19. Individual income tax of ocean-going crew reduced by half

? ? ? ? Relevant laws and regulations:

? ? ? ? Announcement No. 97 of the State Administration of Taxation of the Ministry of Finance in 2019 stipulates that:

? ? ? ? For ocean-going crew members who have been sailing for 183 days in a tax year, their wages and salaries shall be included in the taxable income by 50%.
20. Exemption from epidemic prevention and control subsidies

? ? ? ? Relevant laws and regulations:

? ? ? ? Announcement No. 10 of the State Administration of Taxation of the Ministry of Finance in 2020 stipulates that:

? ? ? ? The temporary work subsidies and bonuses obtained by medical personnel and epidemic prevention workers participating in epidemic prevention and control work in accordance with the standards set by the government are exempt from individual income tax. The standards stipulated by the government include the subsidy and bonus standards stipulated by governments at all levels. The temporary work subsidies and bonuses for personnel involved in epidemic prevention and control stipulated by the people’s governments at or above the provincial level shall be implemented by analogy. Effective from January 1, 2020, the deadline will be announced separately according to the epidemic situation.
21. Protective articles issued by the unit to prevent COVID-19

? ? ? ? Relevant laws and regulations:

? ? ? ? Announcement No. 10 of the State Administration of Taxation of the Ministry of Finance in 2020 stipulates that:

? ? ? ? Drugs, medical supplies, protective equipment and other physical objects (excluding cash) issued by the unit to individuals for the prevention of pneumonia caused by novel coronavirus infection are not included in wages and salaries, and are exempt from individual income tax.
22. Tax exemption for diplomatic personnel

? ? ? ? Relevant laws and regulations:

? ? ? ? Item 8 of Article 4 of the Individual Income Tax Law of the People’s Republic of China stipulates that:

? ? ? ? Income of diplomatic representatives, consular officials and other personnel of embassies and consulates of various countries in China who are exempt from tax according to relevant laws;
23. Eight allowances for foreigners are exempt from tax

? ? ? ? Relevant laws and regulations:

? ? ? ? Cai Shui Zi [1994] No. 20 stipulates that:

? ? ? ? The following income is temporarily exempted from individual income tax:

? ? ? ? （1） Housing subsidies, food subsidies, relocation costs and laundry costs obtained by foreign individuals in the form of non-cash or reimbursement.

? ? ? ? （2） Domestic and overseas travel subsidies obtained by foreign individuals according to reasonable standards.

? ? ? ? （3） The expenses for family visits, language training, children’s education, etc. obtained by foreign individuals shall be considered as reasonable after being examined and approved by the local tax authorities.
24. Exemption from wages and salaries of foreign experts from specific sources

? ? ? ? Relevant laws and regulations:

? ? ? ? According to the provisions of Cai Shui Zi [1994] No. 20:

? ? ? ? The income from wages and salaries of foreign experts who meet one of the following conditions can be exempted from individual income tax:

? ? ? ? 1. Foreign experts directly sent by the World Bank to work in China according to the special loan agreement of the World Bank;

? ? ? ? 2. Experts directly sent by United Nations organizations to work in China;

? ? ? ? 3. Experts working in China for United Nations assistance projects;

? ? ? ? 4. Experts sent by the donor country to work for the country’s free assistance projects;

? ? ? ? 5. Cultural and educational experts who have worked in China for less than two years according to the cultural exchange project signed by the two governments, their wages and salaries are borne by the country;

? ? ? ? 6. Cultural and educational experts who have worked in China for less than two years according to the international exchange program of China’s universities and colleges, and whose wages and salaries are borne by the country;

? ? ? ? 7. For experts who come to China to work through private scientific research agreements, their wages and salaries are borne by the government agencies of the country.
25. Subsidy for tax difference of overseas talents

? ? ? ? Relevant laws and regulations:

? ? ? ? CS [19] No. 31 stipulates that:

? ? ? ? From January 1, 2019 to December 31, 2023, Guangdong Province and Shenzhen City will grant subsidies to overseas (including Hong Kong, Macao and Taiwan, the same below) high-end talents and scarce talents working in Dawan District according to the difference between the individual income tax burden of the mainland and Hong Kong, and the subsidies are exempt from individual income tax.
26. Olympic related foreign technical officials are exempt from tax

? ? ? ? Relevant laws and regulations:

? ? ? ? CS [2017] No. 60 regulation:

? ? ? ? The personal income tax shall be exempted from the labor remuneration paid by the Beijing Winter Olympic Organizing Committee and the test event organizing committee for the foreign consultants, referees and other foreign technical officials who are invited by the Beijing Winter Olympic Organizing Committee to temporarily come to China during the 2022 Winter Olympic Games, the Winter Paralympic Games and the test events and are engaged in the work related to the Olympics.
27. Tax exemption of subsidies in Tibet

? ? ? ? Relevant laws and regulations:

? ? ? ? Cai Shui Zi [1994] No. 021 stipulates that:

? ? ? ? Individual income tax shall be exempted from the allowances and floating wages of the hardship and remote areas obtained by individuals from the Tibet Autonomous Region, the additional seniority wages, and the settlement fees and housing subsidies of retirees.

? ? ? ? Cai Shui Zi [1996] No. 91 stipulates that:

? ? ? ? Individual income tax shall be exempted from the Tibet special allowance obtained by the staff and workers of organs and institutions working in the Tibet region in accordance with the unified provisions of the State.
28. Each province determines the tax reduction range for the income of disabled orphans and martyrs

? ? ? ? Relevant laws and regulations:

? ? ? ? Article 5 of the Individual Income Tax Law of the People’s Republic of China stipulates that:

? ? ? ? Individual income tax may be reduced under any of the following circumstances. The specific range and time limit shall be prescribed by the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government and reported to the standing committee of the people’s congress at the same level for the record: income from disabled, elderly and martyrs’ families.
29. Exemption of housing rental subsidy

? ? ? ? Relevant laws and regulations:

? ? ? ? Announcement No. 61 of the State Administration of Taxation of the Ministry of Finance on the Tax Preferential Policies for Public Rental Housing (2019):

? ? ? ? Individual income tax shall be exempted from the housing rental subsidies received from the local government by urban housing security families that meet the conditions specified by the local government.
30. Partial exemption within 3 times of the one-time compensation income after the termination of labor relations

? ? ? ? Relevant laws and regulations:

? ? ? ? Item 1 of Article 5 of CS [2018] No. 164 stipulates that:

? ? ? ? Individual income tax shall be exempted for the part of the one-time compensation income (including economic compensation, living allowance and other subsidies issued by the employer) obtained by the individual and the employer after the termination of the labor relationship, which is within 3 times of the average wage of the local employees in the previous year; The part exceeding 3 times the amount shall not be included in the comprehensive income of the current year, and the comprehensive income tax rate table shall be applied separately for tax calculation.
31. Tax exemption for one-time bankruptcy settlement fee

? ? ? ? Relevant laws and regulations:

? ? ? ? The provisions of CS [2001] No. 157:

? ? ? ? If an enterprise declares bankruptcy in accordance with the relevant laws and regulations of the state, the one-time settlement fee income obtained by the employees of the enterprise from the bankrupt enterprise shall be exempted from individual income tax.
32. Deferred tax on equity incentives of unlisted companies

? ? ? ? Relevant laws and regulations:

? ? ? ? CS [2016] No. 101 stipulates:

? ? ? ? If the stock options, equity options, restricted stocks and equity awards granted by the non-listed company to the employees of the company meet the prescribed conditions, the deferred tax policy can be implemented after filing with the competent tax authority, that is, the employees can temporarily not pay tax when obtaining the equity incentive, and defer to pay tax when transferring the equity.
33. Individual employees obtain the quantitative assets with ownership, and tax collection is postponed

? ? ? ? Relevant laws and regulations:

? ? ? ? Guo Shui Fa [2000] No. 60 stipulates that:

? ? ? ? When an enterprise under collective ownership is transformed into a joint-stock cooperative enterprise, it can quantify the relevant assets to the individual employees, and suspend the individual income tax on the enterprise’s quantified assets with ownership acquired by the individual employees in the form of shares.

Article source：Lemon Cloud Finance