Article 7 For income gained by taxpayers from outside China, the amount of individual income tax paid outside China shall be permitted to be deducted from the amount of tax payable. The amount to be deducted, however, shall not exceed the amount of tax payable as calculated according to the provisions of this Law on income gained by the taxpayers from outside China.

Article 8 For individual income tax, the income earner shall be the taxpayer, and the paying unit or individual shall be the withholding agent. If a taxpayer’s individual income exceeds the amount specified by the State Council, or a taxpayer receives wages or salaries from two or more sources, or there is no withholding agent, or under other circumstances specified by the State Council, the taxpayer shall file returns and pay tax in accordance with State regulations. The withholding agent shall, in accordance with State regulations, file the returns of all the taxpayers and the full amount of the tax withheld.

Article 9 The tax withheld each month by a withholding agent and the tax paid each month by a taxpayer personally filing tax returns shall be turned in to the State Treasury within the first seven days of the following month and the tax returns submitted to the tax authorities.

The tax payable on income from wages and salaries shall be computed on a monthly basis and turned in by the withholding agents or by the taxpayers to the State Treasury within the first seven days of the following month and the tax returns submitted to the tax authorities. The tax payable on income from wages and salaries for specified trades may be computed on an annual basis and paid in advance in monthly installments, and the specific measures therefor shall be formulated by the State Council.

The tax payable on income gained by self-employed industrial and commercial households from production or business operation shall be computed on an annual basis and paid in advance in monthly installments. Such payment shall be made in advance by taxpayers within the first seven days of the following month, and final settlement shall be made within three months after the end of each year; any excess payment shall be refunded and any deficiency repaid.

The tax payable on income of enterprises and institutions from contracted or leased operation shall be computed on an annual basis and turned in by taxpayers to the State Treasury within 30 days after the end of each year and the tax returns submitted to the tax authorities. Taxpayers who gain income from contracted or leased operation in installments during a year shall pay tax in advance within the first seven days after each installment, and final settlement shall be made within three months after the end of each year; any excess payment shall be refunded and any deficiency repaid.

Taxpayers who earn income outside China shall pay tax to the State Treasury within 30 days after the end of each year and submit the tax returns to the tax authorities.

Article 10 All categories of income shall be computed in terms of Renminbi (RMB). Income in foreign currency shall be taxed on the equivalent amount converted into Renminbi according to the foreign exchange rate quoted by the State exchange control authorities.

Article 11 A service fee at the rate of 2 percent of the amount of tax withheld shall be paid to the withholding agent.

Article 12 Collection and reduction, and termination of the collection, of individual income tax on interest income from savings deposit, and the specific measures therefor shall be prescribed by the State Council.

Article 13 The administration of individual income tax collection shall be governed by the provisions of the Law of the People's Republic of China on the Administration of Tax Collection.

Article 14 The State Council shall, in accordance with this Law, formulate regulations for its implementation.

Article 15 This Law shall go into effect as of the date of its promulgation.

Schedule 1 Individual Income Tax Rates

(Applicable to income from wages and salaries)

Grade Monthly Taxable Income Tax Rate(%)

1 Income of 500 yuan or less 5

2 That part of income in excess of 500 to 2,000 yuan 10

3 That part of income in excess of 2,000 to 5,000 yuan 15

4 That part of income in excess of 5,000 to 20,000 yuan 20

5 That part of income in excess of 20,000 to 40,000 yuan 25

6 That part of income in excess of 40,000 to 60,000 yuan 30

7 That part of income in excess of 60,000 to 80,000 yuan 35

8 That part of income in excess of 80,000 to 100,000 yuan 40

9 That part of income in excess of 100,000 yuan 45

(Note: “Monthly taxable income” mentioned in this schedule refers to the amount remaining after deduction of 1,600 yuan for expenses or an additional deduction of expenses from monthly income in accordance with the provisions of Article 6 of this Law.)

Schedule 2 Individual Income Tax Rates

(Applicable to income gained by self-employed industrial and commercial households from production or business operation and income gained by enterprises and institutions from contracted or leased operation)

Grade Monthly Taxable Income Tax Rate(%)

1 Income of 5,000 yuan or less 5

2 That part of income in excess of 5,000 to 10,000 yuan 10

3 That part of income in excess of 10,000 to 30,000 yuan 20

4 That part of income in excess of 30,000 to 50,000 yuan 30

5 That part of income in excess of 50,000 yuan 35

(Note: “Annual taxable income” mentioned in this schedule refers to the amount remaining after deduction of the costs, expenses and losses from the gross income in a tax year in accordance with the provisions of Article 6 of this Law.)

The English translation is for reference only and if there is any discrepancy, the Chinese version shall prevail.