China: Clarifications on procedures relating to 2022 annual comprehensive income tax reconciliation
Announcement No. 3 provides clarifications on procedures relating to 2022 annual reconciliation filing
Clarifications on procedures relating to 2022 annual reconciliation filing
The State Taxation Administration (on 2 February 2023) published—Announcement on relevant matters relating to the 2022 annual individual comprehensive income tax reconciliation filing (Announcement No. 3)—providing clarifications on procedures relating to the 2022 annual reconciliation filing.
Announcement No. 3 generally follows the basic framework of 2019-2021 annual comprehensive income tax reconciliation filing and includes two new tax-deductible items in addition to the basic provisions. The announcement also emphasises the registration requirements for companies in respect of equity incentive plans and introduces several new measures to enhance tax service quality and optimise taxpayer experience.
The key points are as follows:
- Two new pre-tax deductions
- Itemised deduction for care for infants under the age of three
- Private pension contribution
- Extension of the period for appointments
- Expansion of the scope of taxpayers who can enjoy prioritised tax refund services
- Emphasis on company registration requirements for special income items
KPMG observation
Based on the annual reconciliation experience in the past three years, this year’s annual reconciliation has enhanced tax services and provided for the declaration and deduction of new items, while also emphasising the registration requirements for certain special income items for the first time. Companies and individuals need to pay attention to the following:
- Employers need to consider their employees’ actual situations and the requirements of relevant laws and regulations to improve their internal administration process for the 2022 annual reconciliation
- Individuals need to complete the 2022 annual reconciliation (if required) by 30 June 2023, taking into account their own situations
For more information contact a KPMG tax professional:
David Ling | davidxling@kpmg.com
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