Annual Confirmation for IIT Special Additional Deductions 2025 Deadline Approaching
Kristina Koehler-Coluccia
Setting up companies in China for over 20 years | Specialized in China accounting, tax and payroll
2 min read
From December 1, 2024, the annual confirmation process for individual income tax (IIT) special additional deductions begins. Individuals, including expatriates, are encouraged to assess their eligibility for these deductions. Eligible individuals should confirm their information via designated channels before the end of December. Failure to confirm may lead to missed tax savings opportunities in the following year.
What Are IIT Special Additional Deductions?
Special additional deductions, introduced in 2019, provide tax relief for specific expenses. Under the amended IIT Law, taxable income is calculated after deducting the standard amount (RMB 60,000 annually), contributions to social insurance and housing funds, special additional deductions, and other applicable deductions.
The deductions cover seven categories:
Most deductions are calculated on a fixed basis, except healthcare costs, which are based on actual expenses up to RMB 80,000 per year.
Why Is Confirmation Necessary?
As outlined in the Operating Measures on Special Additional Deductions for IIT (Trial Implementation), individuals must confirm their deduction details annually to allow employers to continue applying the deductions in payroll calculations. Without timely confirmation, deductions will not be applied starting January of the following year, requiring individuals to claim them during the annual tax settlement (March–June of the subsequent year). This delay can result in postponed tax benefits.
Key Dates for 2025 Confirmation
The confirmation period for 2025 begins on December 1, 2024, and ends on December 31, 2024.
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How to Confirm IIT Special Additional Deductions
Taxpayers can confirm their deductions via the IIT app or the e-tax system (Online Tax Bureau for Natural Persons). Registration with these platforms is a prerequisite.
After registration, taxpayers can use the digital platforms to complete their annual reconciliation by following provided instructions.
Do Expatriates Need to Confirm Deductions?
Both domestic and expatriate employees who qualify as resident taxpayers are eligible for these deductions. However, expatriates must choose between special additional deductions and tax-exempt fringe benefits, as they cannot be combined. Once selected, this choice remains fixed for the calendar year.
Expatriates planning to stay in the country for over 183 days in 2024, and who opt to utilise these deductions, must confirm their details in December 2023, in the same way as domestic employees.
Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.
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3 周Kristina Koehler-Coluccia, have you considered how these IIT deductions could transform your financial planning in China? Let's explore the possibilities for optimizing your tax strategy.
???? Important Update from Woodburn for Expatriates and Taxpayers in China! As the annual confirmation period for IIT special additional deductions approaches (December 1–31, 2024), now is the time to act! Confirming your eligibility is crucial for unlocking valuable tax savings for the year ahead. ? What Are IIT Special Additional Deductions? These deductions cover essential expenses like childcare, education, and housing. Failing to confirm could delay your tax benefits until the March–June settlement period. ?? Key Steps: Confirm via the IIT app or e-tax system. Expatriates must choose between these deductions or tax-exempt fringe benefits for the year. At Woodburn, we're here to help you navigate this process and maximize your tax benefits. Ready to optimize your tax strategy? Read the full article for more details! ????