Buying health insurance gets tax exemption
Print Edition
RESIDENTS of large cities in China will enjoy income tax exemption when they buy health insurance products as the authorities aim to boost the insurance industry.
Shanghai, Beijing, Tianjin, Chongqing, and one large city in each of China’s provinces and autonomous regions will pilot the preferential tax policy which allows residents to pay a maximum 200 yuan a month from their pre-tax income when buying designated health insurance products, the Ministry of Finance, the State Administration of Taxation, and the China Insurance Regulatory Commission said in a statement yesterday.
People earning between 5,200 yuan (US$832) and 8,000 yuan a month are able to save 20 yuan a month in income tax if they purchase additional health insurance products. All income taxpayers in the selected cities will be included in the program the CIRC will design special products for. Local authorities have to submit detailed policies to state departments by the end of June, according to the statement.
Analysts said the tax cut is small but the plan signified authorities’ intention to encourage buying insurance and could lead to more preferential tax arrangements such as tax-deferred pension products.
The new insurance policies are complementary to employees’ current medical fund and will offer additional medical compensation and cover critical illness and accidental injury.
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