Recently, the Ministry of Finance and the State Taxation Administration jointly issued Announcement [2019] No. 74 which clarify the situation that other personal income’s application to the new individual income tax regulations.

• Income from guaranty: When an individual obtains payment by providing an enterprise or an individual with a guaranty, he must pay the individual income tax as 20% as the "accidental income".
  
• Gratuitous bestowment of property rights of house: the inheritor is subject to 20% as IIT, except that “in respect of gratuitous bestowment of property rights of houses that comply with any of the following circumstances, both parties thereto are not subject to individual income tax”:
  1. Owners of the houses bestow in a gratuitous manner, the property rights to their spouse, parents, children, grandparents, maternal grandparents, sons' children, daughters' children and sibling;
  2. Owners of the houses bestow in a gratuitous manner, the property rights to the person who directly foster or support them; or
  3. Where owners of the houses pass away, the accepters are the legitimate inheritors, testamentary successors or the devisees.

• The enterprises present gifts: If the enterprises present gifts to individuals under any of the following circumstances, the individuals who obtain the gift income shall pay individual income tax at the tax rate of 20% and according to the item "accidental income":
  1. In the course of business publicity, advertising and other activities, the enterprises present gifts (including online red envelope) at random to individuals not employed by the enterprises; or
  2. The enterprises present gifts to individuals not employed by the enterprises in the course of annual meetings, forums, celebrations, and other activities;
• 3. Exception：The enterprises provide the consumption vouchers, vouchers, coupons by way of price discounts or coupons as a gift to the individuals.

• Individual Tax-deferred Commercial Pension Insurance: For the commercial pension income collected by an individual when certain conditions are met, 25 percent of such income is exempt from taxation, while the remaining 75 percent will be subject to individual income tax levied at a rate of ten percent, and the tax payment shall be brought under the Item "wages, salary income".

If you have any question, please contact me.

Mr. Mike Chang TEL: 0086-21-68868321 / FAX: 0086-21-68868021