Research On The Special Additional Deduction Standard Of Individual Income Tax In China

Since the implementation of the operational measures for special additional deduction of individual income tax(trial implementation)on January 1,2019,the system of special additional deduction of individual income tax has been introduced into China’s individual income tax law for the first time,and this system is closely related to the vital interests of every taxpayer,and it has become a widely discussed modification in the reform of individual tax.In China’s current regulations,the system of special additional deduction for individual income tax provides for a total of six items,they are child education,Continuing education,serious medical care,home loan interest,home rent,and pretax deductions for the elderly.Each item is related to the taxpayer’s cost of living.Among them,the children’s education deduction item is related to the current two-child policy.The housing loan interest deduction item is the concern of all the taxpayers who need to buy a house,the deduction items of supporting the old are related to the increase of the pressure of supporting the old.These six items fully reflect China’s basic people’s livelihood care and attention.However,the relevant provisions in the system still exist and need improvement,including the improvement of the deduction range,deduction criteria and the determination of dynamic adjustment index.In the introduction,this paper makes clear the value and significance of the research on the special additional deduction standard,and the main body first makes clear the concept of the special additional deduction system,based on the theory of individual property right,right to existence,distributive justice and balance ofinterests,this paper analyzes the necessity of the system from three aspects:foundation,aim and premise.Then it introduces the current special additional deduction regulation in our country,and then analyzes the deficiency of this regulation.Among them,the scope of deduction is imperfect,including: the Children’s education expenses deduction age range is narrow,does not include the Children Basic Survival expenses deduction;the specific content of the Continuing education expenses is not clear,the amount of reimbursement provided by the undeducted unit for taxpayers;The scope of major diseases is not clearly defined and the amount of deductions does not distinguish between the mode and stage of diagnosis and treatment;there is no provision for the type of housing to be deducted.The imprecision of the deduction standard is reflected in the factors which are not considered: The family,the region and the stage of education in the deduction of Children’s education;the regional and the Continuing education difference in the deduction;The income difference between urban and rural residents and whether to purchase commercial insurance in the deduction of serious illness medical treatment;the family and regional difference in the deduction of housing-related deduction;.And the uncertainty of the Dynamic Adjustment Index.Next,this paper introduces and analyzes the relevant contents of the expenses deduction in the individual income tax outside China which are related to the six deduction items stipulated by our country,and mainly classifies them according to our country’s item regulations,this paper summarizes the common points of the overseas regulations under this category,and introduces the special regulations with good effect.At the end of the article,on the basis of the inadequacy of the existing provisions mentioned above and the experience of overseas deductions,this paper puts forward detailed suggestions on improving the current system of our country from three aspects: Perfecting the scope of cost deduction,differentiating the deduction standard,and adopting the dynamic adjustment deduction standard of the Consumer Price Index,it includes: expanding the age range of deduction,increasing the deduction,combining with family structure,urban level and other National Education Support Policy;To clarify the scope of continuing education courses and the details of the cost deduction,considering theactual deduction method;to define the definition of major diseases and distinguish the deductible items of different types of major diseases,introducing proportional deduction;to limit the type and area of Housing;The amount of the deduction shall be determined by taking into account the mode of providing for the aged,the economic income level of the dependents,their age and their health condition.