The Implementation Effect of the General Income Tax and the Changes of Tax Planning

Wage and salary income, labor remuneration, author's remuneration and royalties shall be calculated on a consolidated basis by the tax year for the resident individuals in the new Individual Income Tax Law. The implementation effect and tax planning changes of the general income tax has received extensive public concern. On basis of the summary of policy changes of the general income tax, this article analyzes its implementation effect, and concludes that general income tax is helpful for tax reduction and fairness improvement. To perfect the individual income tax, the article analyzes the problems of the general income tax and put forwards some suggestions, just as to unify the caliber of the taxable income of the four income items, to unify the withholding regulations and to optimize pre-tax deduction. Finally, this article discusses the tax planning changes caused by the new general income tax. Keywords—general income; individual income; implementation effect; tax planning