In the last six months, there have been some very important developments with widespread implications in the area of Chinese Individual Income Tax (“IIT”). The State Administration of Taxation (“SAT”) of China issued Public Notice  No.2 (“Public Notice 2”) on January 4, 2011 to announce a list of more than seven hundred tax circulars to be repealed or partially repealed. Included in the list are the following three noteworthy circulars related to IIT (collectively called “IIT Circulars”):
In addition, the SAT also issued another Public Notice in April 2011, Public Notice  No. 27 (“Public Notice 27”), to relax the two-tier limitation for the application of the preferential treatment for share based compensation derived from listed companies under another earlier SAT circular, Guoshuihan  No. 461 (“Circular 461”).