Advances in International Finance

Personal income tax is closely related to residents work and life, and is related to the vital interests of every taxpayer. Since January 1, 2019, China has implemented a new personal income tax policy, which mainly includes the combination of comprehensive and classified collection, the introduction of special additional deduction policies, the increase of personal income tax threshold, the expansion of tax rate brackets, and the adoption of cumulative withholding method. These new measures have to some extent reduced the tax burden on residents and promoted social equity and economic development. Personal income tax planning is the strict adherence to national personal income tax policies and regulations, the lawful and compliant use of personal income tax policies, and the planning of salary and bonus income, deduction items, etc. for personal income tax, in order to achieve reasonable tax avoidance and reduce tax burden. This article takes universities as withholding agents and explores the main problems encountered by university faculty in tax planning under the new personal income tax law. Corresponding strategies and suggestions are proposed to provide reference for universities, reduce the personal income tax burden of university faculty, increase actual disposable income, avoid tax risks, enhance the enthusiasm of university faculty to participate in work, and promote the high-quality development of university education.

Personal income tax; University faculty and staff; Personal income tax planning; Special additional deduction; Year-end bonus