Laws of the People's Republic of China

Ministry of Finance, State Administration of Taxation

Notice of the Ministry of Finance and the State Administration of Taxation on the Issue of the Taxation Policies for the Pilot Reform of Share-trading

Cai Shui [2005] No.103

To the departments (bureaus) of public finance, the bureaus of state taxation and local taxation of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning, the Public Finance Bureau of Xinjiang Production and Construction Corps, and the financial supervision commissioners' offices of the Ministry of Finance stationed in all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning:

With a view to accelerating the development of the capital market and the entire circulation of stock market and promoting the smooth implementation of the pilot reform of share-trading, the notice on the issue of the tax policies for the pilot reform of share-trading, upon approval of the State Council, is notified as follows:

I.

The stamp tax on the stock transfer, which occurs during the course of the pilot reform of share-trading when a non-circulation stock shareholder makes payment of consideration to a circulation stock shareholder, shall be temporarily exempted.

II.

The enterprise income taxes and individual income taxes on the income of shares, cash, etc. paid by a non-circulation stock shareholder to a circulation stock shareholder by way of payment consideration during the course of the pilot reform of share-trading shall be temporarily exempted.

III.

The aforesaid provisions shall come into force as of the date of promulgation.

Ministry of Finance

State Administration of Taxation

June 13, 2005