Free transfer of stocks generally occurs in major asset reorganizations, inheritances, donations and other matters of the company. How should I pay the value-added tax?

The latest value-added tax policy on free transfers of stocks

On September 29, the Ministry of Finance and the State Administration of Taxation issued the "Announcement on Clarifying Value-Added Tax Policies on Free Transfers of Stocks" (Ministry of Finance, Taxation State Administration Announcement No. 40), which clearly stipulates: When a taxpayer transfers a stock for free, the transferor shall use the purchase price of the stock as the selling price and calculate and pay VAT according to the "transfer of financial products"; the transferor shall pay the above-mentioned When the stock is re-transferred, the selling price of the original transferor will be used as the purchase price, and the value-added tax will be calculated and paid according to the "transfer of financial products".

The biggest change in the above policy is that it provides a new method for determining VAT deemed sales income, that is, determining the selling price based on the buying price. According to the relevant provisions of the "Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Launching the Pilot Program of Replacing Business Tax with Value-Added Tax" (Caishui [2016] No. 36), for the transfer of financial products, the sales price shall be the balance after deducting the purchase price from the selling price. The sales calculated in this way is 0, and there is no need to pay VAT on the free transfer of stocks.

Two concepts that must be understood: transfer of stocks and financial products

Stocks: Company shares are in the form of stocks, which refer to the certificates issued by the company to prove the shares held by shareholders, indicating that the stocks The holders own part of the capital of the joint-stock company, which is essentially the carrier of shareholder equity. Because stocks not only contain economic benefits, but can also be listed, circulated and transferred, they are financial commodities.

Transfer of financial products: With reference to the relevant provisions of Annex 1 of the "Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Launching the Pilot Program of Replacing Business Tax with Value-Added Tax" (Caishui [2016] No. 36), the transfer of financial products refers to Business activities that transfer ownership of foreign exchange, securities, non-cargo futures and other financial commodities. The transfer of other financial products includes the transfer of various asset management products such as funds, trusts, and financial products, and various financial derivatives.

What impact does this policy have on enterprises?

This new policy has both advantages and disadvantages for enterprises:

When an enterprise transfers stocks for free, if the closing price of the stock is higher than the purchase price, the enterprise will no longer pay value-added tax. ; However, if the closing price of the stock is higher than the purchase price, the company will no longer carry forward the next tax period to offset the sales volume of the transferred financial products in the next period.

How is the stock purchase price determined?

According to the provisions of the "Announcement of the State Administration of Taxation on Several Collection and Management Issues in the Pilot Program of Replacing Business Tax with VAT" (State Administration of Taxation Announcement No. 53 of 2016), 5. Units will circulate the restricted shares held by them after the ban is lifted. If the shares are subsequently transferred externally, the purchase price shall be determined in accordance with the following provisions:

(1) When a listed company implements the share-trading reform, the original non-tradable shares formed before the resumption of trading, and the original non-tradable shares from the first day of resumption of stock trading to During the lifting of the ban, the stock transfer or transfer arising from the above-mentioned shares shall be based on the opening price on the first day of stock resumption after the listed company completes the share-trading reform as the purchase price.

(2) The restricted shares formed by the company’s initial public offering and listing, as well as the transfer and conversion of the above-mentioned shares between the first day of listing and the date of lifting the ban, shall be deemed as the initial public offering of the listed company’s stocks ( The issue price of IPO is the buying price.

(3) Restricted shares formed due to a major asset reorganization of a listed company, as well as the transfer or transfer of shares arising from the above-mentioned shares between the first day of stock resumption and the date of lifting the ban, in the case of a listed company due to a major asset reorganization The closing price on the trading day before the stock is suspended is the buying price.

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