China Clarifies Taxation of Divorce Settlements

The State Administration of Taxation (SAT) afresh appear the Circular on Clarifying Several Policy Implementation Issues of Individual Income Tax. One above affair discussed was the taxation of annulment settlements.

Under China’s accepted tax law, area an alone transfers acreage or receives a allowance of property, the almsman shall pay 20% of the assets from the gift, and alone accordant taxes and fees may be deducted. The aboriginal amount of the acreage may not be deducted. China’s tax authorities accomplish it bright in the Circular that a analysis of abode acreage rights by agency of acreage analysis pursuant to a annulment are authentic as the couple's auctioning of their acreage of collective tenancy, and individuals who alteration their acreage rights in these affairs shall not be accountable to alone assets tax. For assets acquired from the alteration of houses acquired through a annulment acreage division, the individuals are accountable to alone assets tax for the actual allotment at the assigned tax amount afterwards deducting the aboriginal amount and reasonable expenses. However, for acreage that has been resided in for claimed ancestors use for added than over 5 years, individuals may administer for an absolution from alone assets tax.

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