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New statement clarifies tax questions
October 26, 2009, Monday
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Print Edition
Print Edition
"SHOULD one pay tax on individual transfer of houses obtained through divorce?" "How to pay tax under the double salary system"?
The State Administration of Taxation has newly issued "Notice of Clarifying Some Issues Concerning the Implementation of Several Individual Income Tax Policies," which has all the answers to such questions.
The new policy stipulates that one-time bonuses throughout the year, including year-end pay, income after performance appraisal, will be divided into 12 months to determine the applicable tax rate.
No tax is charged on the individual transfer of houses obtained through divorce.
The division of house property right through divorce shall not be subject to individual income tax. For income derived from transfer of houses obtained through divorce property division, the individuals are subject to individual income tax for the remaining part at the prescribed tax rate after deducting the original value and reasonable expenses. Individuals can apply for exemption from individual income tax for houses which have been used for own family use for over five years,
For example, a resident surnamed Zhao bought a house with 400,000 yuan (US$58,569) in the couple's name before marriage.
Then they divorced and Zhao gave up his part and transferred it to his ex-wife.
The woman plans to sell the house at the price of 600,000 yuan. She should pay 80,000 yuan tax. (600,000-400,000 x 50%) x 20%=80,000
The notice also clarifies that individuals who take positions or act as employer of the company and concurrently assume the posts of director or supervisor of the board shall pay individual income tax on the combined income of director or supervisor fees and their salaries.
The State Administration of Taxation has newly issued "Notice of Clarifying Some Issues Concerning the Implementation of Several Individual Income Tax Policies," which has all the answers to such questions.
The new policy stipulates that one-time bonuses throughout the year, including year-end pay, income after performance appraisal, will be divided into 12 months to determine the applicable tax rate.
No tax is charged on the individual transfer of houses obtained through divorce.
The division of house property right through divorce shall not be subject to individual income tax. For income derived from transfer of houses obtained through divorce property division, the individuals are subject to individual income tax for the remaining part at the prescribed tax rate after deducting the original value and reasonable expenses. Individuals can apply for exemption from individual income tax for houses which have been used for own family use for over five years,
For example, a resident surnamed Zhao bought a house with 400,000 yuan (US$58,569) in the couple's name before marriage.
Then they divorced and Zhao gave up his part and transferred it to his ex-wife.
The woman plans to sell the house at the price of 600,000 yuan. She should pay 80,000 yuan tax. (600,000-400,000 x 50%) x 20%=80,000
The notice also clarifies that individuals who take positions or act as employer of the company and concurrently assume the posts of director or supervisor of the board shall pay individual income tax on the combined income of director or supervisor fees and their salaries.
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