Three Departments Extend Relevant Tax Policies Applicable During the Pilot Program of Domestic Offering of Depository Receipts by Innovative Enterprises

Three departments, including the Ministry of Finance (MOF), recently issued the Announcement on Extending Relevant Tax Policies Applicable During the Pilot Program of Domestic Offering of Depository Receipts by Innovative Enterprises (the "Announcement").

The Announcement covers policies relating to individual income tax, enterprise income tax, and value-added tax. The gains obtained by a corporate investor from transferring Chinese Depositary Receipts (CDRs) offered by an innovative enterprise or the income from dividends and bonuses that it receives for the innovative enterprise's CDRs that it holds will be exempt from enterprise income tax in accordance with the policies for the gains obtained from the transfer of stocks and for income from dividends and bonuses received for stockholding. The gains obtained by a publicly offered securities investment fund from transferring CDRs offered by an innovative enterprise or the income from dividends and bonuses that it receives for the innovative enterprise's CDRs that it holds will also be temporarily exempt from enterprise income tax in accordance with the tax policies for publicly offered securities investment funds. The gains obtained by a qualified foreign institutional investor (QFII) or RMB qualified foreign institutional investor (RQFII) from transferring CDRs offered by an innovative enterprise or the income from dividends and bonuses that it receives for the innovative enterprise's CDRs that it holds shall be deemed to be income from equity asset transfer or income from dividends and bonuses that it obtains from transferring or holding CDRs offered by an innovative enterprise, and will be exempt from enterprise income tax.



(Source: http://szs.mof.gov.cn/zhengcefabu/202601/t20260121_3982336.htm)

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