For all italki Credit withdrawals through Alipay (支付宝), teachers are required to declare personal income and applicable taxes, according to the "People's Republic of China Individual Income Tax Law". These taxes will be automatically withheld and paid on behalf of teachers by Qian Yan Information Technology (Shanghai) Co.
Qian Yan Information Technology (Shanghai) Co., Ltd. is a wholly-owned subsidiary of italki in China.
Taxable income per payment:
* For payments of less than 4000 yuan:
Taxable income = Payment - 800 yuan;
* For payments of more than 4000 yuan:
Taxable income = Payment - (20% of the Payment)
A 20% tax rate is applicable to taxable income.
Formula for calculation of taxes on personal income:
Personal income tax payable = Taxable income × 20%.
Note: If every payment is less than 800 RMB, then there are no applicable taxes, but the revenue still must be reported as personal income.
For credit withdrawal through other payment partners (such as PayPal, bank transfer abroad), no tax is withheld, and italki does not take responsibility for paying or reporting taxable income; this will be the responsibility of the individual teacher.