Achievements and Challenges: Addressing the Lack of Certainty in the PRC’s Continuing Education Special Additional Deduction Policy – Insights from Australia


  • Jun Zhao
  • George Tian
  • Xi Nan
  • Ziyuan Bai


Chinese tax residents receiving comprehensive income1 are now allowed a deduction when they gained continuing education. This deduction is a result of the most recent amendment of the Law of the People’s Republic of China on Individual Income Tax (Individual Income Tax Law)2 in 2018. The amended Individual Income Tax Law3 came into effect on 1st January 2019. According to the new rules, taxpayers pursuing continuing education are eligible for a deduction of RMB 400 per month for a maximum of 48 months for a degree or RMB 3,600 for professional qualification education. However, in practice, such benefits seem not easy to obtain.4 This article examines the policy effectiveness of the Continuing Education Deduction according to Adam Smith’s four principles of good taxation design: convenience, certainty, economy and equality. It pays particular attention to the compliance certainty of this deduction for taxpayers. It explores major challenges for enforcing the tax deduction rules on continuing education and its in-depth reasons. It contends that Australia’s work-related self- education deduction policy could serve as an excellent example of policy certainty and inform China’s further reform of the Continuing Education Deduction policy.