Shenzhen to regulate tax on transfer of share ownership

Starting June 18, Shenzhen will conduct a joint regulation on tax concerning transfer of shares owned by individuals, according to information released by Shenzhen’s taxation authority Tuesday.

The city’s taxation authority will join hands with the market regulation adminstration to further regulate registration regarding changes of such stakes.

The new policy is mainly concerned with three items. First, taxpayers need to make an application at the local tax administrations where the firms are based, before registering change of shareholders at market regulation departments.

Second, related application information will be made available within the taxation and market regulation departments. The market supervision department will only receive registration applications if the applicants have finished making tax declarations.

Third, procedures for reporting tax on transfer of share ownership will take three days. Taxpayers are advised to reserve enough time for this, if necessary.

A 20 percent tax will be imposed on profit from the transfer of share ownership.

Trading of shares listed on the Shanghai and Shenzhen stock exchanges is not subject to the new rule.