Ministry of Finance and State Administration of Taxation, Issues Concerning the Levy of Individual Income Tax on Income from Personal Stock Options Circular

Issued: March 28 2005
Effective: July 1 2005

Main contents: The Circular is divided into six sections covering: the levy of income tax on the stock options of employees, confirmation of the nature of the income from stock options and specific provisions on the levy of tax thereon, division of domestic and foreign sources of wage and salary income, calculation of tax payable, levy and administration, and implementation date.
Related legislation: PRC Individual Income Tax Law (Second Revision), Aug 30 1999, CLP1999 No.8 p12; PRC Individual Income Tax Law Implementing Regulations, Jan 28 1994, CLP1994 No.3 p9; State Administration of Taxation, Issues Relevant to Determining the Tax Obligations of Individuals with no Domiciles in China Who Obtain Their Wages or Salaries in the Form of Negotiable Securities Circular, 2000; State Administration of Taxation, Issuance of the «Several Issues Concerning the Levy of Individual Income Tax Provisions»Circular, 1994 and State Administration of Taxation, Questions Concerning the Levy of Individual Income Tax on Discounts or Subsidies Granted by Employers to Individuals Who Subscribe for Negotiable Securities such as Shares Circular, Jan 20 1998, CLP 1998 No.5 p11