Business tax must be paid on reduction of restricted shares.

Business tax should be levied when non-financial institutions reduce their holdings of restricted shares:

Shareholders of restricted shares include corporate shareholders and individual shareholders.

Article 5, Paragraph 4 of the new business tax regulations that came into effect on January 1, 2009 stipulates: The trading business of foreign exchange, securities, futures and other financial commodities shall be based on the selling price minus the buying price. The balance is the turnover.

Article 18 of the "Implementation Rules of the Interim Regulations on Business Tax" stipulates: The trading business of foreign exchange, securities, futures and other financial commodities mentioned in Article 5 (4) of the regulations refers to the business of taxpayers. Foreign exchange, securities, non-commodity futures and other financial products trading business. Commodity futures are not subject to sales tax.

For individual shareholders, the "Notice of the Ministry of Finance and the State Administration of Taxation on Certain Business Tax Exemption Policies for the Purchase and Sale of Personal Financial Products" (Caishui [2009] No. 111) issued in September 2009 stipulates that for individuals ( Income from the trading of foreign exchange, securities, non-goods futures and other financial products, including individual industrial and commercial households and other individuals, the same below), is temporarily exempt from business tax.

The "Notice of the Ministry of Finance

The State Administration of Taxation on Several Policy Issues on Business Tax" (Caishui [2003] No. 16) divides financial commodities into stocks, bonds, foreign exchange and other financial products. commodity. Undoubtedly, non-financial institutions transfer restricted shares of listed companies that have been lifted from the ban through the Shanghai and Shenzhen stock exchanges. There are restrictions during the lock-up period, but once the ban is lifted, they will be no different from other secondary market stocks. It should be It receives the same tax treatment as other stocks and falls within the scope of business tax on financial product sales. Therefore, starting from January 1, 2009, non-financial institutions should levy business tax on restricted shares reduced through stock exchanges.