Global Equity Services Newsletter October 2019.

Legal News & Analysis - Asia Pacific - Regulatory & Compliance

8 November, 2019

 

The Global Equity Services "Clients & Friends Newsletter" addresses the latest developments related to the constantly evolving global patchwork of laws and regulations governing equity awards and other forms of incentive compensation around the world. This is the October 2019 edition.

 

In this issue: 

 

  • Jen Kirk Returns to Baker McKenzie 
  • GREAT (Global Regulatory Equity Tool) Is Coming
  • IPO Readiness Brochure 

 

Please click here for the full report. 

 

China Extends Preferential Tax Treatment for Equity Income to Non-PRC Tax Residents
 

Pursuant to Bulletin 35 published on March 14, 2019, the Ministry of Finance and the State Taxation Administration extended preferential tax treatment to equity compensation income realized by non-PRC tax residents, effective January 1, 2019.  Previously, uncertainty existed regarding whether preferential tax treatment was available to non-PRC tax residents on income derived from equity compensation awards.

Under Bulletin 35, non-PRC tax residents are allowed to spread the income realized from equity compensation awards within a calendar year over a six-month period for the purpose of determining the applicable income tax rate.  In this regard, the income tax rate and quick calculation deduction applied in the formula for non-PRC tax residents under Bulletin 35 are the monthly income tax rate and quick calculation deduction, which contrasts to those for PRC tax residents who use the annual income tax rate and quick calculation deduction.  For the sake of clarity, Bulletin 35 should not be confused with Notice 35 (dated March 28, 2005), which historically provided preferential tax treatment for PRC tax residents and has since been replaced by Notice 164 (dated December 27, 2018).

Please contact your Compensation attorney for additional information regarding the application of Bulletin 35 to equity compensation income realized by non-PRC tax residents.

 

Baker McKenzie

 

For further information, please contact: 

 

Narendra Acharya, Partner, Baker & McKenzie 

narendra.acharya@bakermckenzie.com