There have rumblings about new tax savings making the rounds of the tax-minded community since mid-December about a change in deductions and a new app on which to claim, and the future is now here.
The app (called 个人所得税, download on the iOs and Android app store, or via the China tax website) will let you file your application for additional deductions straight from your phone, and if you’re fast enough you might even see the benefit in your January pay packet.
There are six deduction categories that domestic and foreign workers can now apply for, but the catch is these new deductions will invalidate your already existing deductibles – housing, laundry, home visits, education, etc – if you’re working here as a foreigner. Those deductions are set to disappear in 2022 anyway, so you can jump on the bandwagon now, or wait to see if there’s any other changes to the tax law in the meantime.
Either way, be aware that you’ll have to wait until the end of the year to switch back to your existing tax structure if you find this trial implementation doesn’t work for you.
Those with children can apply for a monthly 1,000rmb deduction to cover their education expenses and the deduction is applicable for any level of your child’s education from pre-school to doctoral degrees.
If it’s your own education you’re funding, you’re entitled to a 400rmb per month deduction for up to four years, provided it’s for a degree-level qualification. You can get a total deduction of 3,600rmb if you’re studying for a professional qualification. Chinese lessons at Starbucks don’t count.
If you’re a home owner you or your spouse has the right to a 1,000rmb monthly deduction. If, like us, you’re renting that roof over your head, there’s a maximum 18,000rmb per year deduction waiting for you, provided you don’t own property in the city where you work.
Showing its compassion for the people, the State Council will let you deduct 15,000rmb to 80,000rmb from your medical costs if you’re suffering from a serious disease, and only-children with a parent aged over 60 are permitted a monthly deduction of 2,000rmb. If you’ve got siblings though, sorry — you’re going to have to share that deduction with them.
So How Do I Sign-Up?
To use the app, select any of the six deduction categories on the homepage, and it'll take you straight to sign-in. You probably don't have an account, so you'll have to sign up. Hit 注册, and you'll be presented with two options:
The bottom log-in option uses facial recognition, but that's only available for those with a Chinese ID card, ie. probably not you.
The top one uses your 大厅注册码, tax registration number. You probably don't have one. In case you do, select 公众查询 (inquiry), then 纳税人识别查询, and fill in your details. If you have one on record, you'll just have to figure out what your password was. Have fun with that (找回密码 on the log-in page is "recover password"). If you don't, you'll have visit the tax office where the company doing your work permit is registered. If you're lucky enough to work at a company that employs saintlike HR people, they can do it for you.
Is This Worth It?
Probably not right now. Foreign worker deductions are not bad, and if you are taking advantage of them, you will probably want to maintain the status quo. Nonetheless, if you are a tax hound, and want to figure out if you can optimize your set-up, then this app might be worthwhile. For the rest of us, we’ll probably be forced into it in 2022.