international employment law firm alliance L&E Global

China: Tax Authorities empowered to collect the social insurance contribution from companies and individuals

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council recently issued the National Tax and Land Tax Collection and Management System Reform Plan (hereafter referred to as the “Reform Plan”).  The Reform Plan confirms that from January 1, 2019, basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, work-related injury insurance premiums, and maternity insurance premiums will be uniformly collected by the tax authorities rather than the social insurance authorities, as in the past.  Moreover, the Reform Plan proposes to merge national tax and land tax authorities first, the merged tax authorities will then undertake the duty of collecting social insurance premiums as well as governmental non-tax revenue, ensuring that the reform tasks can be completed by the end of 2018.  The announcement of the Reform Plan is interpreted as a stricter enforcement of the Social Insurance Law and a tougher collection mechanism to regulate companies that do not contribute for social insurance in the full amount or on time.