Grant Thornton: Main changes of the administration of individual income tax on income from equity transfer

On December 7, China’s State Administration of Taxation (SAT) released the “Trial Administrative Measures on Individual Income Tax on Income from Equity Transfer (SAT Announcement [2014] No.67),” which will take effect on January 1, 2015. According to the Measures, taxpayers shall pay the individual income tax (IIT) on income derived from equity transfer based on the “income from transfer of property” category stipulated by China’s IIT law. It will be taxed at a rate of 20 percent. In order to file a tax declaration, the tax payer will need to present all relevant documents (including the equity transfer contract, assessment reports of the property value and ID) to the local tax authorities. See more here.