People’s Republic of China – New Rules Aim to Encourage Retirement Savings

People’s Republic of China – New Rules Aim to Enc...

The People’s Republic of China has issued new rules with respect to the taxation of participation in certain employer-sponsored retirement and pension plans. The new rules under Circular 103 became effective on 1 January 2014. The new rules will not only defer the point of taxation of contributions made under a plan to the time of the pay-out, but may also lower the eventual IIT burden on employees to a certain extent. Moreover, companies should also determine whether they are able to fulfill plan registration and tax withholding obligations as required by Circular 103.

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