What should I pay attention to during individual income tax reconciliation?

Starting March 1, 2025, the annual comprehensive individual income tax settlement and payment process begins. What should taxpayers pay attention to during the tax reconciliation? Let’s take a look.

Q

Who needs to do it? When can they do it?

A: The so-called tax reconciliation means reviewing, correcting, and summarizing income and expenses based on the taxes already prepaid by taxpayers during the year. This is also a common international practice.

Through annual reconciliation, taxpayers’ legal rights can be better protected. For example, some deductions can only be accurately determined at the end of the year, so reconciliation is needed to claim those deductions retroactively. Generally, if the amount of tax pre-paid during the year does not match the annual tax payable, taxpayers are required to complete the reconciliation.

The 2025 annual comprehensive individual income tax reconciliation will be processed from March 1 to June 30, 2026. Taxpayers can handle it via the Individual Income Tax APP or the Electronic Tax Bureau website.

Q

What are the main deductible items for individual income tax?

A: China’s individual income tax deductions are relatively numerous. They include the basic deduction, often called the “threshold,” special deductions for “Three Insurances and One Fund,” as well as seven additional deductions such as education for children and supporting elderly parents, plus other deductions like commercial health insurance and personal pensions. These generally cover most living expenses.

For example, in the 2024 tax reconciliation, over 100 million people nationwide benefit from the additional deductions. Among them, middle-aged groups aged 30 to 55, who have elderly parents and young children, are the main beneficiaries, accounting for over 90% of the tax reduction.

Q

What should be paid attention to during the process?

A: When handling the individual income tax reconciliation, taxpayers must ensure that the information provided is truthful, accurate, and complete. Before submitting, confirm that basic information such as contact phone numbers and bank account details are valid.

Do not trust deceptive “tax refund secrets” with misleading promises. Strengthen personal information protection. For matters related to tax payments or refunds, call the 12366 tax service hotline or consult your local tax authority.

Be alert to new scams involving AI virtual customer service for tax refunds. Some scammers illegally obtain tax declaration information and use deepfake technology to generate virtual customer service agents, tricking victims into downloading trojan-infected controls, which then remotely control their mobile banking to steal funds. Do not trust unfamiliar emails, text messages, or social media posts claiming “tax notifications,” and avoid clicking suspicious links or downloading attachments.