Mr. H, a non-domiciled individual, who has resided in the PRC for less than 90 days in 2020. In March 2020, Mr. H received income of equity incentives paid by the China entity totaling RMB500,000, among which the income attributable to his working days in the PRC was RMB180,000. In July 2020, he received income of equity incentives paid by the China entity totaling RMB700,000, among which the income attributable to his working days in the PRC was RMB240,000. The tax payable by Mr. H on income of equity incentives in the PRC is calculated as follows (tax treaties are not considered):

In March 2020, tax payable of Mr. H＝[(180,000÷6) x 25%－2,660] x 6＝RMB29,040

In July 2020, tax payable of Mr. H＝ {[(180,000 + 240,000) ÷6] x 35%－7,160} x 6－29,040＝RMB75,000

Equity incentive of non-resident individuals

Concerning the equity incentive income obtained by non-resident individuals in one month, the PRC IIT derived from equity incentive income shall be calculated separately from other wages and salaries of that month. The equity incentive income can be divided by 6 months without tax deductions (If the non-resident individuals received multiple equity incentive income in a tax year, the income shall be aggregated to determine the applicable tax rate, compute IIT liability and make a reconciliation). The tax payable shall be calculated subject to the monthly tax rates table on consolidated income, with the calculation formula as below:

Tax payable on equity incentive income in the month＝[(Total equity incentive income in the tax year÷6) x applicable tax rate－quick deduction] x 6 - tax paid on equity incentive income during the tax year