Overview

In this edition of China Tax Monthly, Baker & McKenzie discusses several recent tax developments in China. First, the briefing deals with the upcoming changes to the Individual Income Tax law (IIT), specifically including substantive changes that the IIT regime will undergo in the coming months, with the most important change being a revision of tax rates. Second, they discuss the developments in the tax treatment for secondment arrangements.
The briefing also addresses a notice recently issued by the State Administration of Taxation (SAT) on employee equity incentive plans as well as another SAT notice that sets a gross-up requirement when an employer partially bears tax liability for an employee’s annual bonus. As the two SAT notices came into effect on 1 May 2011, it is imperative for companies to be aware of the new requirements and make any necessary adjustments.