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Circular on Relevant Policy on Individual Income Tax for Work-related Injury Insurance Benefits Obtained by Employees with Work-related Injury

On May 29, the Ministry of Finance (the "MOF") and the State Administration of Taxation (the "SAT") announced the Circular on Relevant Policy on Individual Income Tax for Work-related Injury Insurance Benefits Obtained by Employees with Work-related Injury (the "Circular"), effective as of January 1, 2011

As clarified in the Circular, individual income tax is exempted from the work-related injury insurance benefits obtained by employees with work-related injury and their close relatives in accordance with the Regulations on Work-Related Injury Insurance (Order of the State Council No. 586).

Work-related injury insurance benefits include the lump-sum disability allowance, disability subsidy, one-lump work-related injury medical allowance, one-lump disability employment allowance, work-related injury medical benefits, meal allowance during work-related hospitalization, transport, accommodation and catering expenses during non-local medical care period, rehabilitation expenses for work-related injury, aiding device costs and daily life care expenses obtained according to the aforesaid provision, as well as the funeral allowance, bereavement payment to dependent family members and one-lump work-related death allowance obtained by close relatives of the employees died for work-related reasons.


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