China’s 2025 Individual Income Tax (IIT) Reconciliation
- Kristina Coluccia
- Apr 3
- 3 min read
If you worked in China during 2024 and earned income subject to Individual Income Tax (IIT), you may need to participate in the annual reconciliation process between March 1 and June 30, 2025. This annual process ensures that the correct amount of tax has been paid over the year and allows eligible taxpayers to either claim a refund or settle any shortfall.
Here's everything you need to know to complete this process confidently and correctly.
What Is the Annual IIT Reconciliation?
The IIT reconciliation is a year-end process where resident taxpayers calculate their total annual income and compare it to the amount of tax already paid throughout the year. If too much tax was withheld, a refund may be issued. If too little was paid, the taxpayer is responsible for making up the difference.
Income types included in this reconciliation are:
Wages and salaries
Remuneration for services
Author's remuneration
Royalties
Who Must Complete It?
You are required to complete the IIT reconciliation for 2024 if:
You’re a resident taxpayer (this includes foreigners who stayed in China for 183 days or more during the year).
Your total comprehensive income exceeds RMB 120,000, and you owe more than RMB 400 in additional tax.
You are eligible for a tax refund because of overpaid taxes.
Who Can Skip It?
You are exempt from filing the annual reconciliation if:
Your comprehensive income is under RMB 120,000 and your additional tax owed is less than RMB 400.
The total tax paid matches your final liability.
You’re due a tax refund but choose not to claim it.
What Can You Deduct?
During the reconciliation, you can confirm or adjust a wide range of deductions to reduce your tax burden:
Basic deduction: RMB 60,000 standard deduction.
Special deductions: Payments to social insurance and housing funds.
Special additional deductions: Includes expenses for child education, continuing education, serious illness, mortgage interest, rent, and elder care.
Other deductions: Enterprise annuities, commercial health insurance, and personal pensions.
Charitable donations: Contributions to qualifying public welfare causes.
How to File
There are multiple methods to complete the reconciliation:
Self-filing: Use the official tax app or e-tax portal to handle it yourself.
Through your employer: Authorize your employer to submit on your behalf.
Third-party agent: Assign a professional tax service provider or trusted individual to complete the filing.
If you're using online systems for the first time, you may need to register in person at your local tax office, especially if you're a foreign national.
Reporting Equity Incentives
If you received stock options or other equity incentives from multiple employers, you’ll need to consolidate these for accurate tax reporting. These are treated as part of your comprehensive income and are subject to reconciliation.
How to Pay or Get a Refund
Refunds: Provide a valid Chinese bank account for the tax authority to transfer funds to.
Tax due: Payments can be made via online banking, POS terminals at tax offices, bank counters, or third-party payment services.
Deadlines and Phases
March 1–20, 2025: Filing by appointment only (schedule through the tax app starting February 21).
March 21–June 30, 2025: Open filing period — no appointment needed.
What’s New This Year?
A key update to the process now allows for extensions. If you’re unable to file by June 30, you can apply for an extension. Upon approval, you’ll need to prepay an estimated tax amount and complete the final reconciliation within the extended deadline.
Staying compliant with China’s IIT requirements is crucial — not just to avoid penalties but also to reclaim any excess tax you may have paid. Use the available tools and resources to review your income and deductions thoroughly, and seek professional guidance if your situation is complex.
Being proactive ensures a smoother reconciliation process and keeps your financial obligations in check.
At Woodburn Accountants & Advisors, we specialize in navigating China’s complex tax landscape—offering hands-on support with IIT reconciliation, tax optimization strategies, and full compliance to give you complete peace of mind.
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