China - Individual income tax system for dividends to encourage long-term investment

Global Watch ()

China - Individual income tax system for dividends to encourage long-term investment

Following a series of moves to boost China’s capital market, the Chinese state government took another step in leveraging tax policy to encourage long-term investment in domestic listed companies. On November 16, 2012, the Ministry of Finance, State Administration of Taxation and China Securities Regulatory Commission (CSRC) jointly issued a circular Caishui [2012] No.85 (Circular 85). This circular provides different Individual Income Tax (IIT) treatments on dividends received by individual investors from companies listed on the Shanghai and Shenzhen Stock Exchanges (Listed Companies) effective from January 1, 2013.