Stamp Tax Law of the People’s Republic of China was promulgated on 10 June 2021, and will enter into force on 1 July 2022.
There are 16 articles in total. Pursuant to the Stamp Tax law, the current taxation framework will remain unchanged in general, with appropriate simplification of tax items and tax rates and reduction of tax burden.
The key points are as follows:
1. Entities and individuals who issue written taxable documents and engage in securities transactions within the territory of the People’s Republic of China shall be taxpayers of stamp tax. Entities and individuals who issue taxable documents outside the territory of the People’s Republic of China that are used within the territory of the People’s Republic of China shall pay stamp tax in accordance with the provisions of this Law.
2. The stamp tax on securities transactions shall be levied on the transferor rather than the transferee of a securities transaction.
3. For the purpose of obtaining premises to issue written taxable documents, foreign embassies, consulates and representative offices of international organizations in China without needing to pay tax in accordance with the law shall be exempt from stamp tax in accordance with the provisions of the law.
4. Considering the needs of national economic and social development, the State Council may provide for the reduction or exemption of stamp tax under the circumstances of ensuring residents’ housing demand, enterprise restructuring, reorganization and bankruptcy, or supporting the development of small and micro enterprises, with a report to the Standing Committee of the National People’s Congress for the record.
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Contributors: CJO Staff Contributors Team