Ministry of Finance, State Administration of Taxation
Announcement on the continuation of the implementation of the differentiated individual income tax policy on dividends and dividends of companies listed on the National Equities Exchange and Quotations System
Ministry of Finance and State Administration of Taxation Announcement No. 8 of 2024
In order to promote the steady and healthy development of the capital market and support the growth of small, medium and micro enterprises, the following announcement is hereby made on the continued implementation of the differentiated individual income tax policy on dividends and dividends of companies listed on the National Small and Medium-sized Enterprises Share Transfer System (hereinafter referred to as listed companies):
1. If an individual holds shares of a listed company for a period of more than one year, the income from dividends and dividends shall be temporarily exempted from individual income tax.
If an individual holds shares of a listed company for a period of less than 1 month (including 1 month), the full amount of his dividend income shall be included in the taxable income; If the holding period is more than 1 month to 1 year (including 1 year), the dividend income shall be temporarily reduced by 50% and included in the taxable income; The above-mentioned income is subject to individual income tax at a uniform rate of 20%.
The listed company mentioned in this announcement refers to the unlisted public company whose shares are publicly transferred in the national small and medium-sized enterprise share transfer system; The holding period refers to the holding time from the date when an individual obtains the shares of the listed company to the day before the date of transfer and delivery of the shares.
2. When the listed company distributes dividends and dividends, if the individual shares held the shares within 1 year (including 1 year) as of the equity registration date and have not been transferred, the listed company shall not withhold individual income tax for the time being; When an individual transfers shares, the securities depository and clearing company calculates the tax payable according to the holding period, and the securities company and other stock custodians shall deduct and transfer it from the personal fund account and transfer it to the securities depository and clearing company, and the securities depository and clearing company shall transfer the tax to the listed company within 5 working days of the following month, and the listed company shall declare and pay to the competent tax authorities within the statutory declaration period of the month in which the tax is received, and shall handle the full withholding declaration of all employees.
Individuals should keep sufficient funds in the capital account to fulfill their tax obligations in accordance with the law. Securities companies and other stock custodians shall deduct taxes in accordance with the law, and if there are no funds or insufficient funds in the personal fund account, the securities company and other stock custodians shall promptly notify the individual to make up the funds and deduct the taxes.
3. When an individual transfers stocks, the holding period shall be calculated according to the principle of first-in, first-out, that is, the shares obtained first in the securities account shall be deemed to be transferred first.
The taxable income is calculated on the basis of the individual investor's securities account, and the number of shares held is subject to the holding record of the individual investor's securities account after the daily end of the day, and the number of shares acquired or transferred in the securities account is the net increase (subtraction) of the number of shares after the daily day-end settlement.
4. Individual income tax shall be levied on the dividends and dividends obtained by securities investment funds from listed companies in accordance with the provisions of this announcement.
5. The shares of listed companies held by individuals in this announcement include:
(1) Stocks obtained before listing on the National Equities Exchange and Quotations (NEEQ);
(2) Shares obtained through the transfer of the national small and medium-sized enterprise share transfer system;
(3) Stocks obtained as a result of judicial deduction;
(4) Stocks obtained by inheritance or division of family property in accordance with law;
(5) Shares acquired through acquisition;
(6) Stocks obtained from the exercise of warrants;
(7) Shares subscribed for or converted using corporate bonds with stock options and convertible into shares;
(8) Obtaining issued shares, allotments, stock dividends and provident fund to increase share capital;
(9) The merger of the listed company, and the shares of the merged company that are converted into the shares of the merged company held by individuals;
(10) The shares of the company after the division held by the individual that are converted into the shares of the divided company by the division of the listed company;
(11) Other stocks obtained from the National Equities Exchange and Quotations for Small and Medium-sized Enterprises.
6. The transfer of shares mentioned in this announcement includes the following circumstances:
(1) Transfer of shares through the national small and medium-sized enterprise share transfer system;
(2) The shares held are judicially deducted;
(3) Transfer of ownership of shares due to inheritance, donation or division of family property in accordance with law;
(4) accepting a tender offer with shares;
(5) exercising the cash option to transfer the shares to a third party providing the cash option;
(6) subscribing or subscribing for shares of exchange-traded funds (ETFs) with stocks;
(7) Other circumstances that have the substance of the transfer.
7. Individual income tax shall be levied on the dividends and dividends obtained by individuals and securities investment funds from the original STAQ and NET system listed companies listed on the National Small and Medium-sized Enterprise Share Transfer System (hereinafter referred to as the two network companies) and the delisted companies listed on the National Small and Medium-sized Enterprise Share Transfer System, but the restricted shares of the delisted companies shall be subject to the notice of the Ministry of Finance, the State Administration of Taxation and the China Securities Regulatory Commission on Issues Concerning the Implementation of the Differentiated Individual Income Tax Policy on Dividends and Dividends of Listed Companies (CS [2012]) No. 85) Article 4 shall be implemented.
8. The year (month) mentioned in this announcement refers to the natural year (month), that is, holding shares for one year refers to continuous shareholding from a certain month of the previous year to the day before the same month and the same day of the current year, and holding shares for one month refers to the continuous holding of shares from a certain day of the previous month to the day before the same day of the current month.
9. Departments of finance, taxation, and securities supervision should strengthen coordination and full cooperation, and earnestly do a good job in all aspects of policy implementation.
Listed companies, two-network companies, delisted companies, securities registration and clearing companies, securities companies and other stock custodians should actively cooperate with the tax authorities to do a good job in the collection and management of individual income tax on dividends and dividends.
10. This announcement will be implemented from July 1, 2024 to December 31, 2027, and dividends will be distributed to listed companies, two network companies, and delisted companies, and the equity registration date will be from July 1, 2024 to December 31, 2027, and the dividend income shall be implemented in accordance with the provisions of this announcement. On the date of implementation of this announcement, the shares of listed companies, two-network companies and delisted companies held by individual investors in their securities accounts shall be calculated from the date of acquisition.
The announcement is hereby made.
Ministry of Finance, State Administration of Taxation
June 28, 2024
Source: State Administration of Taxation website
Edit: Ruyue
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