Special Deductions for Individual Income Tax (Part 2)
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Chapter 5 Housing Loan Interest
Article 14 Where a taxpayer or his/her spouse singly or jointly use(s) a commercial bank loan or housing provident fund personal housing loan to purchase a house in China for himself/herself or his/her spouse, the first-time housing loan interest expenses shall be deducted in accordance with the standard of RMB1,000 per month in the year(s) when the loan interest actually occurs, and the deduction period shall not exceed 240 months. A taxpayer is entitled to interest deduction of first-time housing loan only once.
First-time housing loan referred to in these Measures shall mean the housing loan for which the first-time housing loan interest rate is applicable for purchasing of housing.
Article 15 The husband and the wife may agree and choose one of them to claim deduction; the detailed deduction method shall not be changed within a tax year.
For the first-time housing loan incurred by the husband and the wife for houses purchased respectively before the marriage, the couple may, after marriage, choose one of the houses to claim 100% deduction of the loan interest expenses in accordance with the deduction standard, or may claim 50% deduction for the house purchased by himself/herself respectively; the detailed deduction method shall not be changed within a tax year.
Article 16 Taxpayers shall retain their housing loan contract and proof of loan repayment expenditure for future inspection.
Chapter 6 Housing Rent
Article 17 The housing rent expenses incurred by a taxpayer who does not own a house in his/her main workplace city may be deducted at a fixed amount in accordance with the following standards:
(1) the deduction standard shall be RMB1,500 per month for centrally-administered municipalities, provincial capital (capital) cities and municipalities with unilateral planning, as well as other cities determined by the State Council;
(2) except for cities listed in item (1), the deduction standard shall be RMB1,100 per month for city-governed districts with a household registered population exceeding 1 million; the deduction standard shall be RMB800 per month for city-governed districts with a household registered population not exceeding 1 million.
Where a taxpayer's spouse owns a house in the taxpayer's main workplace city, the taxpayer shall be deemed to own a house in his/her main workplace city.
The household registered population of a city-governed district shall be based on the data published by the National Bureau of Statistics.
Article 18 Main workplace city referred to in these Measures shall mean the entire administrative region of the centrally-administered municipality, municipality with unilateral planning, sub-provincial city, or prefecture-level city (region, state, league) at which the taxpayer is employed; where a taxpayer does not have an employer, his/her main workplace city shall be the city where the tax authorities process computation and settlement of the taxpayer's consolidated income.
Where the husband and the wife work in the same main workplace city, only one party can claim deduction for housing rent expenditure.
Article 19 Housing rent expenditure shall be deducted by the lessee who enters in to the house rental contract.
Article 20 A taxpayer and his/her spouse shall not claim special additional deductions concurrently for housing loan interest and housing rent within a tax year.
Article 21 Taxpayers shall retain the relevant materials such as housing rental contract, agreement etc for future inspection.
Chapter 7 Support for Elderly
Article 22 The support expenditure incurred by a taxpayer supporting one or more dependents shall be deducted at a fixed amount in accordance with the following standards:
(1) where the taxpayer is the only child, deduction shall be deducted at a fixed amount in accordance with the standard of RMB2,000 per month;
(2) where the taxpayer is not the only child, he/she and the sibling(s) shall share the deduction limit of RMB2,000 per month, however the limit shared by each person shall not exceed RMB1,000 per month. The taxpayer and the siblings may claim equal shares of deduction or agree on the sharing ratio, or the dependent(s) may designate the sharing ratio. A written sharing agreement shall be concluded for agreed or designated sharing; designated sharing shall take precedence over agreed sharing. The detailed sharing method and amount shall not be changed within a tax year.
Article 23 Dependents referred to in these Measures shall mean parents aged 60 and above, as well as paternal grandparents and maternal grandparents aged 60 and above whose child(ren) has/have passed away.
Other provisions:
Article 25 A taxpayer claiming special additional deductions for the first time shall submit the information relating to the special additional deductions to the withholding agent or the tax authorities, the withholding agent shall promptly submit the relevant information to the tax authorities, and the taxpayer shall be responsible for the veracity, accuracy and integrity of the information submitted.
Where there is any change in the special additional deduction information, the taxpayer shall promptly provide the relevant information to the withholding agent or the tax authorities.
Article 29 Parents referred to in these Measures shall mean biological parents, step-parents and adoptive parents. Children referred to in these Measures shall mean children born in wedlock, children born out of wedlock, stepchildren and adopted children. For guardians of underaged persons who are non-parents, the provisions of these Measures shall apply as reference.
Article 30 Special additional deductions for individual income tax which are not used up in a tax year shall not be carried forward to subsequent years for deduction.