03 February 2016

China launches pilot implementation of Individual Income Tax policy for commercial health insurance products

The Ministry of Finance (MOF), State Administration of Taxation (SAT) and China Insurance Regulatory Commission (CIRC) have jointly released Circular 126, which outlines the pilot Individual Income Tax (IIT) policy for commercial health insurance products. Under the Circular, the purchase of qualifying health insurance products in pilot areas can be deducted for IIT purposes. The changes have come into effect from January 1, 2016.

A Tax Alert prepared by Ernst & Young's Human Capital Group, and attached below, provides additional details.

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Document ID: 2016-0232