With the great development of the capital market, buying and selling equity has become a common investment method for individuals. Individual tax in the process of equity investment has increasingly become the focus of tax authorities. Then, which links of equity investment need to pay personal income tax? Mande Enterprise Service is here to sort out and summarize for you.

I. Obtaining dividends and bonuses

According to China's tax law, dividends of individual shareholders belong to "interest, dividends and bonus income" in personal income, and the personal income tax rate of 20% is applicable. However, for natural person shareholders who hold shares, the applicable individual income tax policies are different according to their holding time. According to the Notice of the State Taxation Administration of The People's Republic of China Securities Regulatory Commission of the Ministry of Finance on Relevant Issues Concerning Individual Income Tax Policies for Dividends and Dividends of Listed Companies (Caishui [2015]10/No.), the summary is as follows:

Second, the equity transfer

In 20 14, State Taxation Administration of The People's Republic of China issued the Measures for the Administration of Individual Income Tax on Equity Transfer (Trial) (State Taxation Administration of The People's Republic of China Announcement No.67 of 20 14), which stipulated the issues related to individual income tax on equity transfer.

(A) the definition of individual equity transfer

Equity transfer refers to the behavior that individual (natural person) shareholders transfer their equity or shares invested in enterprises in China (excluding sole proprietorship enterprises and partnership enterprises) to other individuals or legal persons, including the following situations:

1, sale of equity;

2. The company repurchases equity;

3. When the issuer issues new shares to the public for the first time, the shareholders of the invested enterprise will sell their shares to investors in the form of public offering;

4. The equity is forcibly transferred by judicial or administrative organs;

5. Investing abroad with equity or conducting other non-monetary transactions;

6. Pay off debts with equity;

7. Other equity transfer behaviors.

(2) Income from individual equity transfer

Personal income from equity transfer, that is, the balance of equity transfer income after deducting the original value of equity and reasonable expenses, is taxable income, and personal income tax is calculated and paid at the tax rate of 20% according to "property transfer income". Reasonable expenses refer to the relevant taxes and fees paid in accordance with the regulations when the equity is transferred. Therefore, the two most important factors involved in the calculation of personal income from equity transfer are the income from equity transfer and the confirmation of the original value of equity.

1, income from equity transfer

Income from equity transfer refers to cash, objects, securities and other forms of economic benefits obtained by the transferor due to equity transfer. All kinds of money related to equity transfer obtained by the transferor, including liquidated damages, compensation and other names of money, assets, rights and interests, shall be incorporated into equity transfer income.

At the same time, Announcement No.67 stipulates that, according to the transfer contract, the follow-up income obtained after meeting the agreed conditions shall be regarded as the income from equity transfer. That is to say, if there are gambling conditions or other conditions in the process of equity transfer, the subsequent additional payment made by the transferee by the transferor (that is, the additional payment in the case of prepayment+additional gambling) should also be incorporated into the equity transfer income.

If the transferor is under any of the following circumstances, the competent tax authorities may verify the transferor's equity transfer income in turn according to the net assets verification method, analogy method and other reasonable methods:

1. The declared income from equity transfer is obviously low without justifiable reasons;

2. Failing to file tax returns within the prescribed time limit, and being ordered by the tax authorities to file tax returns within the time limit, and failing to file tax returns within the time limit;

3. The transferor is unable to provide or refuses to provide relevant information on the income from equity transfer;

4. Other circumstances in which the income from equity transfer should be verified.

2. Confirmation of the original value of equity

The original value of the individual's equity transfer shall be confirmed according to the following methods:

1. For the equity acquired by cash contribution, the original value of the equity shall be confirmed according to the sum of the actual payment and the reasonable taxes directly related to the acquisition of the equity;

2. The original value of the equity obtained by means of non-monetary assets investment shall be confirmed according to the sum of the reasonable taxes and fees directly related to the price of non-monetary assets and the acquisition of equity at the time of investment or approval by the tax authorities;

3. If the equity is acquired through free transfer, and the above-mentioned equity transfer income is obviously low, but it is considered as justified, the original value of the equity shall be confirmed according to the sum of the reasonable tax incurred in acquiring the equity and the original value of the original holder's equity;

4. If the invested enterprise turns capital reserve, surplus reserve and undistributed profit into share capital, and individual shareholders have paid personal income tax according to law, the original equity value of the newly converted share capital shall be confirmed by the sum of the increased amount and relevant taxes and fees;

5. In addition to the above circumstances, the original value of the equity shall be reasonably confirmed by the competent tax authorities in accordance with the principle of avoiding repeated collection of individual income tax.

If the equity transferor has been approved by the competent tax authorities and personal income tax is levied according to law, the original value of the equity transferee shall be confirmed by the sum of the reasonable taxes and fees incurred when acquiring the equity and the equity transferor's equity transfer income approved by the competent tax authorities.

If an individual fails to provide a complete and accurate certificate of the original value of the equity and cannot correctly calculate the original value of the equity, the original value of the equity can be verified by the competent tax authorities.

It should be noted that if an individual obtains the equity of the same invested enterprise for many times, when transferring part of the equity, the "weighted average method" is adopted to determine the original value of the equity.

In practice, especially under the subscription system of registered capital, it is often the case that shareholders transfer their shares without completing all their capital contribution obligations. For how to calculate personal income tax for such share transfer, please refer to the Chinese tax "How to calculate the tax for subscribed shares without capital contribution?"

Third, the partnership needs to pay taxes "through"

The tax policies applicable to partnership enterprises are different from those of corporate shareholders and natural person shareholders. From the perspective of income tax policy, partnership enterprises are not an independent taxpayer.

The Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on the Income Tax of Partners in Partnership Enterprises (Caishui [2008]159) clearly states that a partnership enterprise takes each partner as the taxpayer. If the partners of the partnership are natural persons, individual income tax shall be paid; If the partners are legal persons or other organizations, they shall pay enterprise income tax. However, when calculating the taxable income, the relevant policies of individual income tax shall be applied, in accordance with the Provisions on Individual Income Tax Collection by Investors in Sole proprietorship Enterprises and Partnership Enterprises (Caishui [2000] No.91) and the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Relevant Issues Concerning Adjusting the Pre-tax Deduction Standard of Individual Income Tax of Sole proprietorship Enterprises and Partnership Enterprises (Caishui [2008] No.65).

Circular 59 and subsequent restructuring policies regulate enterprise income tax, that is, enterprises subject to enterprise income tax. Therefore, the special tax treatment policy cannot be applied to the foreign investment of partnership enterprises with equity. Due to the particularity of partnership, it can neither apply the deferred tax policy of enterprise investment in document 1 16 nor the deferred tax policy of individual investment in document 4 1. In this way, the income generated by the partnership's foreign investment in equity should be included in the taxable income in the investment year and declared to pay income tax. Therefore, for investors, we should combine specific investment plans, choose appropriate investment methods and investors, and maximize investment returns.

In the current capital operation business, individual equity transfer has the characteristics of extensive transaction, complex situation and hidden transfer. In order to better obtain the information of equity transfer, the tax authorities have strengthened cooperation with the industrial and commercial departments and realized the timely sharing of tax-related fee information through the tax-related information exchange platform. In addition, in the 20 17 Key Work Arrangement of Tax Inspection issued by State Taxation Administration of The People's Republic of China Inspection Bureau (No.29 of the General Tax Collection Letter [2017]), the Inspection Bureau of the State Administration of Taxation requires that the personal income tax and related enterprise income tax inspection be carried out with the equity transfer as the breakthrough point. From this point of view, the tax issues involved in equity transfer will be the key direction of tax inspection this year. In order to reduce and avoid unnecessary tax risks, individual shareholders should attach great importance to the tax-related issues in equity transactions, and at the same time, when investing in equity, they should carry out relevant tax planning on investment forms, investors, and locations.

Fourth, foreign investment with equity

Since China's tax law regards non-monetary assets investment as two links: transfer and investment, investors need to bear the corresponding taxes and fees in the transfer link. At the same time, in order to encourage and guide investment, the state has successively issued a series of tax policies. In 2009, the Ministry of Finance and State Taxation Administration of The People's Republic of China issued the Notice on Several Issues Concerning the Handling of Enterprise Income Tax in Enterprise Reorganization (Caishui [2009] No.59). There have been two completely different views on whether the No.59 document can be applied to natural person shareholders: it can be applied and it cannot be applied. In 20 15, the Announcement of State Taxation Administration of The People's Republic of China on Several Issues Concerning the Collection and Management of Enterprise Income Tax on Enterprise Restructuring Business (State Taxation Administration of The People's Republic of China Announcement No.48 of 20 15) was issued, and Announcement No.48 stipulated that in the process of restructuring transaction, the transferor of equity acquisition may be a natural person; At the same time, it is also stipulated that the natural persons in the parties should be taxed according to the relevant provisions of individual income tax. Announcement No.48 clarifies that natural person shareholders can participate in enterprise restructuring, but the income tax policy cannot be applied to the special tax treatment in No.59, and should be implemented according to the relevant policies of personal income tax.

In 20 15, the Ministry of Finance and State Taxation Administration of The People's Republic of China issued the Notice on Individual Income Tax Policies for Personal Non-monetary Assets Investment (Caishui [2015] No.41), which stipulated that individuals investing abroad with equity belong to the simultaneous transfer of equity and investment. Personal income tax shall be calculated and paid according to the project of "income from property transfer" for the income from personal equity transfer. Individuals should report and pay taxes to the competent tax authorities within 15 days of the month following the above taxable behavior. If taxpayers have difficulty in paying taxes in one lump sum, they can reasonably determine the installment payment plan and report it to the competent tax authorities for the record, and pay individual income tax in installments within no more than five calendar years (inclusive) from the date of the above taxable behavior. Therefore, according to the current policy, there are two ways to deal with the personal income tax of individuals investing abroad by equity: one-time calculation of the transfer income according to the "property transfer income" project, and declaration and payment of personal income tax; Or pay taxes in five-year installments. This is different from corporate shareholders, so special tax treatment cannot be applied.