Circular of the Shanghai Local Taxation Bureau on the Opinions in Connection with the Handling of Issues Concerning the Collection of Business Tax on Such Business Operations as Proprietary Securities and Freight Forwarding

Circular of the Shanghai Local Taxation Bureau on the Opinions in Connection with the Handling of Issues Concerning the Collection of Business Tax on Such Business Operations as Proprietary Securities and Freight Forwarding

Hu Di Shui Yi [1995] No. 60

December 6, 1995

In recent days, this Bureau has received from some sub-bureaus applications for instructions on the following issues: the taxation basis of the business tax on the proprietary securities business of financial institutions, taxation basis of the business tax on the service fee revenue of securities dealers from agency securities business, issues concerning the collection and exemption of business tax on the interest due on various state treasury bonds, state bonds and corporate bonds purchased by enterprises and public institutions, issues concerning the collection and exemption of the business tax on the income of enterprises from lending in the name of investment, and issues concerning the collection of business tax on the commission obtained by business entities from freight forwarding and agency insurance business, among others. Upon due deliberations, the following provisions are hereby made on the above issues in accordance with the Interim Regulations of the People's Republic of China on Business Tax and the Implementing Rules thereof, and the Interpretations of the Business Tax Items.

I. On the taxation basis of the business tax on the proprietary securities business of financial institutions
The business tax payable by a financial institution for its proprietary securities business shall be calculated and collected on the basis of the difference between the selling price and the buying price of the securities involved. The business tax payable by a financial institution may be calculated and collected on the basis of the consolidated sum of the differences between the selling prices and buying prices of all types of securities that the institution trades in. Where the income of the institution from securities trade is negative in a month, such deficit may be deducted from the taxable income of the institution in the then current accounting year.
In view of the fact more than one calculation method is used in the proprietary securities business, the taxation basis of the business tax on the difference between the selling price and buying price of such proprietary securities business may be determined according to the most appropriate among the following methods:
1.
　　......