From December 1, 2024, the annual confirmation process for individual income tax (IIT) special additional deductions begins. Individuals, including expatriates, are encouraged to assess their eligibility for these deductions. Eligible individuals should confirm their information via designated channels before the end of December. Failure to confirm may lead to missed tax savings opportunities in the following year.
What Are IIT Special Additional Deductions?
Special additional deductions, introduced in 2019, provide tax relief for specific expenses. Under the amended IIT Law, taxable income is calculated after deducting the standard amount (RMB 60,000 annually), contributions to social insurance and housing funds, special additional deductions, and other applicable deductions.
The deductions cover seven categories:
Childcare for children under three years of age
Education expenses for children
Continuing education expenses
Healthcare costs for serious illness
Housing loan interest
Expenses for supporting the elderly
Housing rent
Most deductions are calculated on a fixed basis, except healthcare costs, which are based on actual expenses up to RMB 80,000 per year.
Why Is Confirmation Necessary?
As outlined in the Operating Measures on Special Additional Deductions for IIT (Trial Implementation), individuals must confirm their deduction details annually to allow employers to continue applying the deductions in payroll calculations. Without timely confirmation, deductions will not be applied starting January of the following year, requiring individuals to claim them during the annual tax settlement (March–June of the subsequent year). This delay can result in postponed tax benefits.
Key Dates for 2025 Confirmation
The confirmation period for 2025 begins on December 1, 2024, and ends on December 31, 2024.
How to Confirm IIT Special Additional Deductions
Taxpayers can confirm their deductions via the IIT app or the e-tax system (Online Tax Bureau for Natural Persons). Registration with these platforms is a prerequisite.
Chinese nationals and permanent residents can register using face recognition and verification.
Foreign taxpayers must obtain a registration code from their local tax bureau, which may involve submitting documents in person or via their employer through a power of attorney.
After registration, taxpayers can use the digital platforms to complete their annual reconciliation by following provided instructions.
Do Expatriates Need to Confirm Deductions?
Both domestic and expatriate employees who qualify as resident taxpayers are eligible for these deductions. However, expatriates must choose between special additional deductions and tax-exempt fringe benefits, as they cannot be combined. Once selected, this choice remains fixed for the calendar year.
Expatriates planning to stay in the country for over 183 days in 2024, and who opt to utilise these deductions, must confirm their details in December 2023, in the same way as domestic employees.
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