Abstract On April 9, the State Administration of Taxation issued an announcement to clarify the policy of personal income tax collection and management of non-monetary assets including real estate and equity, which reduced the tax avoidance space of such taxes in the investment, and the shareholders of listed companies increased their capital and issued additional shares. Reorganization, non-monetary transactions, etc.
On April 9, the State Administration of Taxation issued an announcement to clarify the policy of personal income tax collection for non-monetary assets including real estate and equity, which reduced the tax avoidance space for such taxes, and increased capital, additional issuance and restructuring of listed company shareholders. Non-monetary transactions, etc. or the collection of huge taxes. In recent years, in the economic activities of new establishments, mergers and acquisitions, capital increase and share expansion, and private placements, individuals are directly investing in non-monetary assets such as equity, scientific and technological achievements, and real estate, and most of them involve tax issues.
The Ministry of Finance and the State Administration of Taxation recently issued Caishui [2015] No. 41, which stipulates that the income of individuals transferring non-monetary assets shall be calculated and paid according to the law according to the “property transfer income†project at a rate of 20%. The Announcement of the State Administration of Taxation on the Collection and Management of Individual Income Tax on Non-Monetary Assets Investment on April 9 further clarified the collection and management measures.
The instalment tax payment policy will be implemented as of April 1, 2015. For personal non-monetary assets investment before April 1, 2015, if the tax treatment has not been carried out and the period from the date of occurrence of the above taxable behavior is less than 5 years, the taxable amount may be paid in installments within the remaining period. .
Non-monetary assets refer to assets other than monetary assets such as cash and bank deposits, including equity, real estate, technological inventions and other forms of non-monetary assets. The establishment of new enterprises with non-monetary assets, or participation in capital increase and share expansion, private placement of shares, restructuring and other similar investments, is called non-monetary assets investment.
Previously, there was a vague zone for individuals to adopt a non-monetary asset investment tax policy. In 2005, the State Administration of Taxation explicitly invested in the assessment of non-monetary assets by individuals, and the income from the evaluation of value-added was not levied personal income tax when investing in corporate equity. If the income is recovered when the investment is recovered, transferred or liquidated, a separate tax will be imposed. In 2011, the State Administration of Taxation made it clear that individuals participate in the private placement of listed companies by equity, and collect personal income tax based on the proceeds of property transfer. However, because the details were not clear, they were not implemented during the implementation.
When the relevant person in charge of the Income Tax Department of the State Administration of Taxation answered the reporter's question, he said that because there is no or only a small amount of cash flow in the process of non-monetary asset investment transactions, and most of the transaction amount is large, the taxpayer may lack sufficient funds to pay taxes, resulting in disputes between the two parties. Larger, tax authorities also face a dilemma in law enforcement.
Many industry insiders said that in the past, personal income for non-monetary assets investment was less taxed in practice. The clarity of this policy may reduce the past tax haven space. "If strictly enforced, the personal income tax burden of non-monetary asset investment may increase substantially, and the shareholders of listed companies with such investment behavior may be subject to huge taxes." A taxation expert told reporters.
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