Mar 2009, Issue 4
China tax for foreign corporate investors investing in the stock of Chinese listed companies
In the time when the global stock markets are suffering heavily since the last quarter of 2008, the Chinese State Administration of Taxation ("SAT") has issued new circulars to reinforce the collection of Withholding Income Tax ("WHT") on the income to foreign investors derived from the Chinese listed companies' shares.
The relevant SAT circulars are:
- Guoshuihan [2008] No.897 ("Circular 897") issued in November 2008 addressing the WHT treatment on dividends from H Shares; and
- Guoshuihan [2009] No.47 ("Circular 47") issued in January 2009 addressing the WHT treatment on dividend, bonus profits and interest derived by Qualified Foreign Institutional Investors ("QFIIs").
In this Issue, we will share with you the salient points of these new circulars, our observations, as well as some critical outstanding issues in these circulars.
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