The State Taxation Administration published guidance Announcement No. 44 (known in English as: “Announcement on relevant policies regarding 2019 individual income tax annual comprehensive income tax reconciliation”) to clarify details of the 2019 annual comprehensive income tax reconciliation (or “annual reconciliation”).
Announcement No. 44 was issued after completion of public consultation on “Announcement on annual comprehensive income tax reconciliation.” Read TaxNewsFlash
Announcement No. 44 broadly adopts the policies set out in the consultation document, but also introduced the following additions and changes:
Obligations of withholding agents
Information reporting and retention
Following the public consultation, Announcement No. 44 further clarifies the obligations of individual taxpayers and withholding agents. It continues to focus on the traditionally successful strategy of using the withholding mechanism, and aims to ease the administrative burdens on individual taxpayers.
In the meantime, while confirming the obligations of withholding agents, Announcement No. 44 provides that withholding agents can also support the taxpayers by providing training and guidance to complete the annual reconciliation online filing as well as tax payment or refund process. The tax authorities will also introduce a series of relevant services (including enhancement of policy interpretation and administrative support, providing filing software to withholding agents) in order to reduce the burdens on withholding agents.
As the first annual reconciliation under the latest tax reform, it brings challenges to taxpayers and withholding agents. Considering the complex and technical nature of taxation, Announcement No. 44 also emphasises that annual reconciliation can be performed by professional tax advisers. This implies that withholding agents and taxpayers need to consider seeking support from professional advisers to determine that their obligations are fulfilled in a timely manner. In particular, the following entities need to consider contacting professional advisers in respect of the 2019 annual reconciliation:
For more information, contact a KPMG tax professional:
David Ling | +1 609 874 4381 | firstname.lastname@example.org
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