China’s Individual Income Tax Law: Tax Rate
China’s Individual Income Tax Law: Tax Rate
Individual income tax is levied at excess progressive tax rate or proportional tax rate. Income from wages and salaries is taxed based on the balance of monthly income minus RMB 3,500 at the excess progressive tax rate. The revised Individual Tax Law has changed the excessive progressive tax rate for income from wages and salaries from 9 levels to 7 levels, abolishing the rates of 15% and 40% and expanding the scope of application of the lower rates of 5% and 10%. The first-level tax rate of 5% has been revised to 3%, and the corresponding monthly taxable income has been expanded from no more than RMB 500 to RMB 1,500, and the monthly taxable income corresponding to the second-level tax rate of 10% has been expanded from no more than RMB 500 - 2,000 to RMB 1,500 - 4,500. And the coverage of the highest tax rate of 45% has been expanded to include the taxable income that was applicable to the tax rate of 40%, increasing the tax burden on high-income individuals.
Robert Zhang 
Steve Li 