1. The preferential tax policies for equity incentive of listed companies stipulated in the Announcement of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Continuing to Implement Individual Income Tax Preferential Policies such as One-time Bonus for the Whole Year (Announcement No.202 1 No.42 of the Ministry of Finance) will continue to be implemented from June12023 to February 3 1 2023.
2. The preferential personal income tax policies stipulated in the Announcement of the Securities and Futures Commission of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Continuing to Implement the Interconnection Mechanism of Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Markets and Mutual Recognition of Individual Income Tax Policies between Mainland and Hong Kong Funds (Announcement No.93 of the Securities and Futures Commission of the Ministry of Finance and State Taxation Administration of The People's Republic of China) will continue to be implemented from 1 in 2023 to 1 in February 2023.
Interpretation of relevant policies
1. The Announcement of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Continuing to Implement Individual Income Tax Preferential Policies, such as One-time Bonus for the whole year, stipulates that the implementation period of individual income tax preferential policies for equity incentives of listed companies is extended to February 3, 20221,and is now extended to February 3, 20231. The announcement pointed out that individual residents' stock options, stock appreciation rights, restricted stocks, equity incentives and other equity incentives that meet the relevant conditions will not be incorporated into the comprehensive income of the year, and the comprehensive income tax rate table will be applied separately for tax calculation.
The calculation formula is: tax payable = equity incentive income × applicable tax rate-quick deduction.
2. The Announcement of the State Taxation Administration of The People's Republic of China Securities Regulatory Commission of the Ministry of Finance on Continuing to Implement the Interconnection Mechanism of Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Markets and Mutual Recognition of Individual Income Tax Policies between Mainland and Hong Kong Funds pointed out that from February 5, 2006 to February 5, 2022, individual investors obtained the transfer differential income from investing in stocks listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, as well as the transfer differential income from buying and selling Hong Kong fund shares through mutual recognition.