Recently, the Ministry of Finance and the State Administration of Taxation have issued new announcements. There will be many changes in personal income tax in 2024, let's take a look!
It is related to the individual income tax related to the equity incentive of listed companies
On April 26, the Ministry of Finance and the State Administration of Taxation recently issued the "Announcement on Individual Income Tax Policies Related to Equity Incentives of Listed Companies".
According to the Announcement, for stock options, restricted stocks and equity awards granted to individuals by domestic listed companies, individuals may pay individual income tax within a period of no more than 36 months from the date of exercise of stock options, release of restricted shares or acquisition of equity awards (hereinafter referred to as "exercise") after filing with the competent tax authorities. If a taxpayer resigns during this period, he or she shall pay all taxes before leaving the company.
The term "domestic listed company" mentioned in the announcement refers to a company limited by shares whose shares are listed and traded on the Shanghai Stock Exchange, Shenzhen Stock Exchange and Beijing Stock Exchange.
The Announcement will be implemented from January 1, 2024 to December 31, 2027, and taxpayers who exercise their rights during this period may be executed in accordance with the provisions of this Announcement. If the taxpayer exercises the right after January 1, 2023 and has not paid the full amount of the tax, it can be implemented in accordance with the provisions of this announcement, and the time limit for paying the tax in installments shall be calculated from the date of its own right.
The announcement clarifies that the securities regulatory department and the tax department shall establish an information sharing mechanism, share the relevant information on equity incentives of listed companies with the tax department on a quarterly basis, and the financial, taxation and securities regulatory departments shall jointly implement the policy.
In August last year, the Ministry of Finance and the State Administration of Taxation issued the "Announcement on Extending the Implementation of Individual Income Tax Policies Related to Equity Incentives of Listed Companies", aiming to continue to support the innovation and development of enterprises.
It is clarified that the acquisition of equity incentives (hereinafter referred to as equity incentives) such as stock options, stock appreciation rights, restricted stocks, and equity awards by resident individuals is in line with the Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning the Levy of Individual Income Tax on Income from Individual Stock Options, the Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning the Levy of Individual Income Tax on Income from Stock Appreciation Rights and Income from Restricted Stocks, and the Notice of the Ministry of Finance Article 4 of the Notice of the State Administration of Taxation on Extending the Relevant Tax Pilot Policies of the National Independent Innovation Demonstration Zone to the Nationwide Implementation, and Article 4 (1) of the Notice of the Ministry of Finance and the State Administration of Taxation on Improving the Income Tax Policies Related to Equity Incentives and Technology Shareholdings shall not be incorporated into the comprehensive income of the current year, and the full amount shall be separately applied to the comprehensive income tax rate table for tax calculation.
Shenzhen's latest notice: some individual income tax is exempted!
Shenzhen recently issued the "Implementation Measures for the Preferential Individual Income Tax Policies for the Shenzhen Park of the Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone in the Hetao", which clearly exempts Hong Kong residents working in the Shenzhen Park from the part of their individual income tax burden that exceeds the tax burden of Hong Kong.
Hong Kong residents who meet the conditions of individual income tax incentives for Hong Kong residents and individual income tax incentives for high-end talents and talents in short supply outside the Guangdong-Hong Kong-Macao Greater Bay Area within the same tax year may choose to enjoy one of the preferential treatments, but not both at the same time.
Conditions and scope of exemption :
Hong Kong residents who enjoy the benefits of these measures shall meet the following conditions at the same time:
(1) the taxpayer has the status of a Hong Kong resident;
(2) Holding, being employed and actually working in a substantive operating enterprise or other institution registered in the Shenzhen Park during the tax year, or providing independent personal labor services in the Shenzhen Park, or engaging in production and business activities in the Shenzhen Park, and paying individual income tax in accordance with the law in the Shenzhen Park;
(3) Comply with laws and regulations, and have no major tax violations and untrustworthy conduct within three years prior to enjoying the preferential policies of these Measures.
The individual income of the individual who enjoys the discount is as follows:
(1) Comprehensive income from Shenzhen Park. Include:
Income from wages and salaries refers to the wages, salaries, bonuses, year-end salary increases, labor bonuses, allowances, subsidies and other income related to the position and employment obtained by an individual from the employer for holding or being employed in the Shenzhen Park.
Income from remuneration for labor services refers to the income obtained by individuals from Shenzhen Industrial Park for engaging in labor services in Shenzhen Industrial Park.
The income from author's remuneration refers to the income obtained by individuals from Shenzhen Park for the publication and publication of their works in the form of books, newspapers and periodicals.
The income from royalties refers to the income obtained by individuals from Shenzhen Park for the provision of patent rights, trademark rights, copyrights, non-patented technologies and other concession rights, and the income obtained from the provision of copyright use rights, excluding the income from author's remuneration.
(2) Business income derived from Shenzhen Park. Specifically, it refers to the income obtained from production and business activities in Shenzhen Park.
(3) Talent subsidy income obtained from talent projects or talent projects obtained by governments at or above the district level or government departments or directly affiliated institutions in Futian District, Shenzhen.
The income in this clause does not include the income from audit and tax assessment.
Individual income tax, halved!
The Ministry of Finance and the State Administration of Taxation recently jointly issued the "Guidelines for Supporting the Development of Preferential Tax Policies for Small and Micro Enterprises and Individual Industrial and Commercial Households (2.0)", which pointed out that from January 1, 2023 to December 31, 2027, the part of the annual taxable income of individual industrial and commercial households not exceeding 2 million yuan will be reduced by half of the individual income tax. On the basis of enjoying other existing preferential individual income tax policies, individual industrial and commercial households can enjoy this preferential policy in addition.
1. When to enjoy it?
2. How to calculate the amount of tax reduction?
2024 New Edition Individual Income Tax Rate Table!
The following 9 types of income are subject to individual income tax:
✦Comprehensive income: income from wages and salaries, income from remuneration for labor services, income from author's remuneration, income from royalties.
✦ Itemized income: income from business, income from interest, dividends and bonuses, income from property leasing, income from property transfer, and incidental income.
1. Individual income tax rate table
2. Proportional tax rate: 20%
Applicable to interest, dividends, bonus income, income from property leases, income from property transfer and incidental income.
Sources: Ministry of Finance, Shenzhen Municipal Taxation Bureau, Tax Transactions, Finance First Classroom, etc.