China Law Online Database : novexcn.com

You are using Guest Account

Subscribe To This Law Only

Subscribe To All Law Contents

Print This Page

Back




	CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE TAXATION ADMINISTRATION ON THE TAXATION ON THE OPEN-END SECURITIES INVESTMENT FUNDS

	(No. 128 [2002] of the Ministry of Finance and the State Administration of Taxation promulgated on August 22, 2002)


SUBJECT : OPEN-END SECURITIES INVESTMENT FUNDS
ISSUING DEPARTMENT : MINISTRY OF FINANCE OF THE PEOPLE'S REPUBLIC OF CHINA, STATE ADMINISTRATION OF TAXATION
ISSUE DATE : 08/22/2002
IMPLEMENT DATE : 08/22/2002
LENGTH : 482 words
TEXT :

In order to support and actively cultivate the institutional investors, make full use of the means of open-end funds, further extend public investment avenues, and promote the healthy and stable development of the securities market, we hereby, upon the approval of the State Council, give our notice regarding the taxation issues concerning the open-end securities investment funds (hereinafter referred to funds) established upon the approval of China Securities Regulatory Commission as follows:

I. BUSINESS TAX

(1) Raising money by means of issuing funds does not belong to the taxation scope of business tax, and no business tax shall be levied.

(2) The price difference income of the fund managers obtained from buying or selling stocks and bonds with funds shall be temporarily exempted from business tax by the end of 2003.

(3) Business tax shall be levied on the price difference income of financial institutions (including banks and non-bank financial institutions) serving as fund subscribing and redeeming entities; while no business tax shall be levied on the price difference income of individual and non-financial institutions serving as fund subscribing and redeeming entities.

II. INCOME TAX

(1) The price difference income of the fund managers obtained from buying or selling stocks and bonds with funds shall be temporarily exempted from enterprise income tax by the end of 2003.

(2) No individual income tax shall be levied on the price difference income obtained by individual investors serving as fund subscribing and redeeming entities before the levy of individual income tax upon the price difference income from their buying and selling stocks is recovered; while enterprise income tax shall be levied on the price difference income obtained by enterprise investors serving as fund subscribing and redeeming entities, which shall be included in the taxable income of the enterprise.

(3) With respect to the income obtained by the fund from stock dividends and bonuses, the income from the interest of bonds, and the income from the interest of savings deposits, 20% of the individual income tax shall be withheld and remitted by the listed company, enterprise or bank that issues the bonds when it is paying the above income to the fund. As for the income obtained by the investors (including individuals and institutional investors) from funds, the individual income tax and enterprise income tax shall not be levied for the time being.

III. STAMP DUTY

(1) The stamp duty shall be levied at the rate of 0.2% on the fund managers who use funds to buy and sell stocks.

(2) As for the investors serving as fund subscribing and redeeming entities, no stamp duty shall be levied for the time being.

IV. Business tax, enterprise income tax and other relevant taxes shall be levied on the income obtained by the fund managers, fund trustees and fund commission agencies from fund management activities in accordance with the relevant provisions in the tax law.