China tax law | Historical and current reference
China Income Tax Rates: 2017-2018 Slabs and 2026 Individual and Corporate Tax Guide
Understand China's individual income tax (IIT), corporate income tax (CIT), deductions, foreign taxpayer residency rules and historic 2017-2018 rates. All figures are in Chinese yuan (CNY/RMB), unless stated otherwise.
Current China individual income tax rates (2026)
Under the Individual Income Tax Law, Article 2 defines comprehensive income as wages and salaries, remuneration for personal services, author's remuneration and royalties. Article 3 establishes progressive rates of 3% to 45%; Article 6 sets the annual standard deduction of RMB 60,000 for resident individuals, plus permitted special and additional deductions.
The following brackets apply to annual taxable comprehensive income after allowable deductions, not to gross salary.
| Annual taxable income (RMB) | Marginal rate | Quick deduction (RMB) |
|---|---|---|
| Up to 36,000 | 3% | 0 |
| Over 36,000 to 144,000 | 10% | 2,520 |
| Over 144,000 to 300,000 | 20% | 16,920 |
| Over 300,000 to 420,000 | 25% | 31,920 |
| Over 420,000 to 660,000 | 30% | 52,920 |
| Over 660,000 to 960,000 | 35% | 85,920 |
| Over 960,000 | 45% | 181,920 |
Source: Individual Income Tax Law, Schedule 1; State Taxation Administration's published tax-rate schedules. The quick deduction helps calculate tax within a bracket; it is not an extra deduction from gross income.
Business income tax rates
Income from individual business operations is taxed separately under the IIT Law at progressive rates of 5%, 10%, 20%, 30% and 35%, using the annual business-income schedule. Interest, dividends, rental income, property transfers and incidental income generally fall under a 20% proportional IIT rate, subject to exemptions and special rules.
China employment income tax slabs in 2017 and early 2018
Before the 2018 reforms took effect, the monthly wage and salary IIT brackets were:
| Monthly taxable salary after deduction (RMB) | Rate | Quick deduction (RMB) |
|---|---|---|
| Up to 1,500 | 3% | 0 |
| Over 1,500 to 4,500 | 10% | 105 |
| Over 4,500 to 9,000 | 20% | 555 |
| Over 9,000 to 35,000 | 25% | 1,005 |
| Over 35,000 to 55,000 | 30% | 2,755 |
| Over 55,000 to 80,000 | 35% | 5,505 |
| Over 80,000 | 45% | 13,505 |
For most domestic employees, the standard monthly deduction was RMB 3,500; qualifying foreign nationals and certain Hong Kong, Macau and Taiwan individuals historically received a RMB 4,800 deduction. These historical deduction amounts should not be applied to current tax calculations.
Historical annual bonus tax rate reference
The original article described a historical method for separately taxed annual bonuses. Its bracket equivalents are retained for reference below. Bonus taxation and available election rules have changed; confirm the applicable rules for the year of payment.
| Historical annual bonus equivalent (RMB) | Illustrative bracket rate |
|---|---|
| Up to 18,000 | 3% |
| Over 18,000 to 54,000 | 10% |
| Over 54,000 to 108,000 | 20% |
| Over 108,000 to 420,000 | 25% |
| Over 420,000 to 660,000 | 30% |
| Over 660,000 to 960,000 | 35% |
| Over 960,000 | 45% |
Tax residency, foreign individuals and China-source income
Article 1 of the Individual Income Tax Law: a person domiciled in China, or a person without domicile who spends at least 183 days in China during a tax year, is generally a resident individual. Resident individuals are generally subject to IIT on China-source and foreign-source income, with specific relief rules. Non-residents are generally taxed on China-source income.
Tax-treaty provisions, employment-day tests, the identity of the paying employer and special rules for non-domiciled residents can affect the outcome. The older 90-day, treaty 183-day and five-year descriptions are not a substitute for the post-2018 residency framework.
China-source income can include remuneration for work physically performed in China; rent from property used in China; gains on Chinese immovable property; royalties for rights used in China; and certain interest and dividends from Chinese payers. Actual sourcing depends on the nature of the transaction and applicable regulations.
Allowable deductions and annual reconciliation
- Standard deduction of RMB 60,000 per year for residents' comprehensive income.
- Qualifying statutory social insurance and housing fund contributions.
- Special additional deductions for qualifying education, continuing education, serious illness medical expenses, housing, elderly care and eligible child-care costs, subject to prevailing requirements.
- Other lawful deductions and eligible charitable donations, where applicable.
Under the State Taxation Administration's annual filing rules and its 2025 reconciliation measures, resident individuals with comprehensive income may need an annual reconciliation, depending on filing requirements and exemptions.
China corporate income tax: 2017-2018 and current framework
Article 4 of the Enterprise Income Tax Law sets the general CIT rate at 25%. Article 28 provides statutory preferential rates for qualifying high-technology and small low-profit enterprises. Other programmes are subject to detailed qualification, industry and time-period rules.
| Enterprise or tax treatment | Rate / treatment | Legal basis or qualification |
|---|---|---|
| Standard resident enterprise | 25% | Enterprise Income Tax Law, Article 4 |
| Qualified high and new technology enterprise | 15% | Article 28; certification required |
| Qualified small and low-profit enterprise | 20% statutory preferential rate | Article 28; separate effective-burden relief may apply |
| Qualifying software and integrated-circuit businesses | Special preferential treatment | Specific eligibility and incentive period required |
| Qualified technology-advanced service enterprise | 15% where applicable | Subject to prevailing programme requirements |
| Qualifying regional development projects | Potential 15% or other incentives | Check geographic and sector-specific conditions |
The statutory 20% rate for qualifying small and low-profit enterprises must be distinguished from preferential taxable-income reductions that can produce a lower effective tax burden. The original article's 2017 special 10% effective burden for certain small low-profit enterprises was tied to a time-limited measure, not a universal permanent rate.
Historical incentives mentioned in the 2017-2018 article
The original coverage also included preferential arrangements for integrated circuit production and design, key software enterprises, technology-advanced services, selected development zones (Qianhai, Hengqin and Pingtan), and encouraged enterprises in western China. Those incentives were conditional and some specified periods ending in 2017, 2019 or 2020. They are not automatically applicable in 2026; the relevant approval, current catalogue and incentive legislation must be checked.
Corporate residency and taxable profits
Enterprise Income Tax Law, Article 3: resident enterprises generally pay CIT on worldwide income. Non-resident enterprises are taxed according to whether they have a Chinese establishment and whether the income is effectively connected with it. Article 5 defines taxable income by reference to gross income, non-taxable and exempt income, permitted deductions and eligible losses. Articles 26-30 address selected exemptions, reduced rates and additional deductions.
Official Chinese tax legislation and guidance
- Individual Income Tax Law - official English translation (STA)
- Individual Income Tax Law - official Chinese text
- Enterprise Income Tax Law - official English translation
- State Taxation Administration - official English portal
- State Taxation Administration - Chinese portal
Updated October 23, 2026. This guide provides general information, not tax advice. Official Chinese-language laws and current implementing rules prevail over translations and summaries.