INDIVIDUAL INCOME TAX LAW OF THE PEOPLE´S REPUBLIC OF CHINA
        (Standing Committee, National People´s Congress: 31 October 1993)
        Whole Doc.

Article 1
     Individual  income  tax  shall  be  levied  in  accordance  with  the provisions of this Law by individuals  who  have  domicile  in  China,  or though without domicile but have resided for one year or more in China  on their income derived from sources within and outside China.
     Individuals who are neither domiciled nor resident in China,  or  who are not domiciled and reside for less than one year in  China,  shall  pay individual income tax in accordance with this Law on income  derived  form sources within China.

Article 2
     Individual income tax shall be levied on the following categories  of income:
     (1) income from wages and salaries;
     (2)  income  from  production  or  business  operation  derived   by individual industrial and commercial households;
     (3) income from contracted or leased operation of enterprises or institutions;
     (4) income from remuneration for personal service;
     (5) income from author´s remuneration;
     (6) income from royalties;
     (7) income from interest, dividends and bonuses;
     (8) income from lease of property;
     (9) income from transfer of property;
     (10) contingent income; and
     (11) other income specified as taxable by the finance  department  of the State Council.

Article 3
     Individual income tax rates:
     (1) income from wages and salaries shall be taxed at progressive rates ranging from 5% to 45% (see the appended tax rate schedule).
     (2) Income from production and business of individual industrialists and merchants and income from contracted or leased operation of enterprises or institutions shall be taxed at progressive rates ranging from 5% to 35% (see the appended tax rate schedule).
     (3) Income from author´s remuneration shall be taxed at a flat rate of 20%. The amount of tax payable however shall be reduced by 30%.
     (4) Income from remuneration for personal service shall be taxed at a flat rate of 20%. Where a specific payment of income from remuneration for personal service is excessively high, additional tax can be levied at a rate to be specifically determined by the State Council.
     (5) Income from royalties, interest,  dividends,  bonuses,  lease  of property and transfer of property, as well as contingent income and  other income shall be taxed at a flat rate of 20%.

Article 4
     The following categories of income shall be exempted from  individual income tax:
     (1)  awards  for  achievements  in  science,  education,  technology, culture, public health,  physical  culture  and  environmental  protection granted by the provincial people´s governments, ministries and commissions under the State Council, the People´s Liberation Army units at army  level and above and by foreign or international organizations;
     (2) interest income on saving deposits and national debt obligations and other financial debentures issued by the state;
     (3)  subsidies and allowances received under the state uniform provisions;
     (4) welfare benefits, survivors pensions and relief payments;
     (5) insurance indemnities;
     (6) military severance pay and demobilization pay received by members of the armed forces;
     (7) settlement pay, severance  pay,  retirement  pay  and  retirement living allowances received by public  servants  and  workers  under  state
uniform provisions;
     (8) income derived by the diplomatic agents and consular officers and other personn