Measures for the Annual Reconciliation and Final Settlement of Individual Income Tax on Comprehensive Income

Order of the State Taxation Administration
(No. 57)

The Measures for the Annual Reconciliation and Final Settlement of Individual Income Tax on Comprehensive Income, as deliberated and adopted at the first executive meeting in 2025 of the State Taxation Administration on February 21, 2025, is hereby issued and shall come into force on the date of issuance.

Hu Jinglin, Commissioner of the State Taxation Administration
February 26, 2025

Measures for the Annual Reconciliation and Final Settlement of Individual Income Tax on Comprehensive Income
(Issued by Order No. 57 of the State Taxation Administration on February 26, 2025, and coming into force on February 26, 2025)

Chapter I General Provisions
Article 1 For the purposes of protecting the lawful rights and interests of taxpayers and regulating the annual reconciliation and final settlement of individual income tax on comprehensive income, these Measures are developed in accordance with the Individual Income Tax Law of the People's Republic of China and the Regulation on the Implementation thereof (hereinafter collectively referred to as the “Individual Income Tax Law”), the Law of the People's Republic of China on the Administration of Tax Collection and the Detailed Rules for the Implementation thereof (hereinafter collectively referred to as the “Law on the Administration of Tax Collection”) and other relevant provisions.
Article 2 The individual income tax on the comprehensive income obtained by a taxpayer shall be calculated by the tax year on a consolidated basis, and annual reconciliation and final settlement shall be conducted in accordance with the law.
Article 3 For the purpose of these Measures, “comprehensive income” means the income from wages and salaries, income from remuneration for labor services, income from author's remuneration, and income from royalties obtained by taxpayers.
For the purpose of these Measures, "Annual Reconciliation and Final Settlement" refers to the act by which taxpayers aggregate their comprehensive income obtained within a tax year, and after deducting expenses of RMB 60,000, as well as special deductions, special additional deductions, other deductions determined by law, and qualified charitable donations, they apply the applicable individual income tax rate for comprehensive income and subtract the quick deduction. Then, after deducting tax reductions and exemptions, they calculate the actual taxable amount for the current year, further deduct the prepaid tax amount, determine the amount of tax to be refunded or supplemented for that tax year, and perform tax declaration and settle tax payments with the tax authorities within the statutory time limit. The specific calculation formula is as follows:
Amount of Tax Refundable or Payable = [ (Comprehensive Income Amount – RMB 60,000 – Special Deductions (e.g., social insurance and housing provident fund) – Special Additional Deductions (e.g., children's education) – Other Legally Determined Deductions – Qualified Public Welfare and Charitable Donations) × Applicable Tax Rate – Quick Deduction ] – Tax Reductions and Exemptions – Prepaid Tax Amount
The foreign income obtained by a taxpayer shall be declared to the extent of the amount actually incurred in accordance with relevant provisions.
Article 4 A taxpayer shall determine the tax year when the foreign income is obtained based on the time when the comprehensive income is actually obtained.
If the foreign tax year when the foreign income is obtained is not the same as the Gregorian calendar year, the Gregorian calendar year to which the last day of the foreign tax year belongs shall be the Chinese tax year for the foreign income.
Article 5 A taxpayer shall conduct the annual reconciliation and final settlement between March 1 and June 30 of the year following the tax year when the comprehensive income is obtained. Where a taxpayer who has no domicile in China leaves China before commencement of the annual reconciliation and final settlement, he or she may do it before leaving China.
Article 6 Where a taxpayer has prepaid his or her individual income tax in accordance with the law when he or she obtained his or her comprehensive income and falls under any of the following circumstances, he or she is not required to conduct annual reconciliation and final settlement:
1. The taxpayer needs to pay taxes in arrears upon the annual reconciliation and final settlement but the annual comprehensive income does not exceed the prescribed amount.
2. The taxpayer needs to pay taxes in arrears upon the annual reconciliation and final settlement but the amount of taxes in arrears does not exceed the prescribed amount.
3. The amount of taxes that have been prepaid by the taxpayer is the same as the actual amount of taxes payable upon the annual reconciliation and final settlement.
4. The taxpayer is eligible for tax refund upon the annual reconciliation and final settlement but fails to apply for the tax refund.
Article 7 A taxpayer of comprehensive income shall conduct an annual reconciliation and final settlement in accordance with the law under the following circumstances:
1. The amount of taxes that have been prepaid is larger than the actual amount of taxes payable upon the annual reconciliation and final settlement, and the taxpayer applies for tax refund.
2. The amount of taxes that have been prepaid is less than the actual amount of taxes payable upon the annual reconciliation and final settlement and the circumstances specified in Article 6 of these Measures do not apply.
3. The understatement of comprehensive income or failure to declare comprehensive income is caused by any error in the application of income items, the withholding agent's failure to perform the withholding obligation in accordance with the law, or the absence of a withholding agent for the comprehensive income obtained.
Chapter II Preparations for the Annual Reconciliation and Final Settlement and Entry of Relevant Items
Article 8 Before conducting the annual reconciliation and final settlement, a taxpayer shall confirm the validity of his or her basic information, such as the contact phone number and bank account entered, and consult and confirm his or her comprehensive income, related deductions, amount of already paid taxes, and other information through the individual income tax APP, the website of electronic tax administration for natural persons (hereinafter referred to as the “website”) or the withholding agent.
Article 9 A taxpayer may apply for deduction or supplementary deduction of the following items when making his or her annual reconciliation and final settlement:
1. RMB 60,000 yuan of deductible expenses.
2. Eligible special deductibles, such as basic pension insurance, basic medical insurance, unemployment insurance, and other social insurance premiums and housing provident funds.
3. Eligible special additional deductibles of expenditures for the care of infants and children aged three or less, education of children, continuing education, medical treatment of serious diseases, housing loan interest o......