SAT Requires Wide Dissemination of Individual Income Tax Policies Concerning Transfer of Non-tradable Shares

A Circular was recently promulgated by the State Administration of Taxation (SAT), in which the tax authorities in various regions are required to enhance the studying, comprehension, dissemination and tutorship of tax policies by means of careful organizing and thorough arrangement, to set out plans as soon as possible and to make full preparations so as to ensure the complete implementation of individual income tax policies regarding transfer of non-tradable shares.
　　As the Circular points out, collecting individual income tax on the individual income from transfer of non-tradable shares has wide implications, involves a number of policy considerations, and is complex in terms of implementation procedures. The tax authorities at all levels are required to, besides coordinating with SAT in disseminating the policies and strengthening internal studying and training efforts, earnestly fulfill their duties in carrying out policy dissemination and taxpaying tutorship at their respective localities. On the one hand, the tax authorities shall disseminate on a wide scale the significance, contents, scope of taxation and other aspects of tax policies in an effort to gain support and facilitate comprehension from/of the society and taxpayers. It is particularly emphasized that efforts should be enhanced to disseminate polices providing that the individuals' earnings from their transfer at Shanghai Stock Exchange and Shenzhen Stock Exchange of shares of listed companies which have been acquired at either public offerings of listed companies or at transfer markets shall continue to be exempted from individual income tax liabilities. On the other hand, the tax authorities are required to optimize various tax service measures, and conduct taxpaying tutorship to meet the needs of specific groups. Efforts should be strengthened to provide taxpaying tutorship for securities companies, individual stockholders of non-tradable shares and individual stockholders of newly-listed companies within their jurisdiction, especially individuals who transfer non-tradable shares. Efforts should be made to make full use of tax service halls, taxation websites, 12366 taxation service hotline, short message service (SMS) and other channels for dissemination of various aspects of tax policies such as the scope of taxation, tax computation methods, time limit for tax payment, procedures for tax declaration, documents needed for tax payment, ways for obtaining tax payment receipts, tax collection and administration measures, relevant legal obligations and so on, with an aim to facilitate taxpayers' comprehension of policy gist and taxpaying procedures, which is considered conducive to enhancing the taxpayers' compliance with tax laws and regulations, promoting their declaration of tax payment in due course according to law, and protecting the lawful rights and interests of taxpayers.