December 4, 2020, China's State Tax Administration (STA) released a Statement about Simplifying and Optimizing Individual Income Tax Prepayments for Some Taxpayers (STA Statement  No. 19), aimed to reduce the tax return burden of some taxpayers and their withholding representatives.
Started on the 1st January 2021 the notice allow taxes payers with cumulated salaries under RMB 60 000 to use a direct RMB 60 000 quick deduction for the year to come.
This concern only employees (foreign or local) whose wages (salaries + bonus and other related labor borne revenue) were less than 60 000 yuan in 2020 or those who didn't have wages in 2020.
Employee and withholding agent of employees who will report a regular salaryover 12 months of less or equal to 5000 per month will not be impacted.
This regulation does not impact the total final amount of taxes.
The employee needs to have worked with the same employer continuously for the last year and continue to work for the same employer.
To resume: Only employee and withholding agent who will declare at least one salary of more than RMB 5000 per month for a total of less than RMB 60.000 per year are concerned.
It just changes the way to calculate and withhold taxes and simplify taxation for this category of employees.