Core Points - The Ministry of Finance and the State Administration of Taxation issued a notice to support the transfer of state-owned equity and cash income to the social security fund, exempting certain income from value-added tax [1] - The notice will be effective from April 1, 2024, and allows for tax refunds on previously paid taxes that meet the criteria [1] - The transfer of state-owned capital to the social security fund is a significant measure to enhance the sustainability of the basic pension insurance system [1] Group 1 - The notice specifies that the entities responsible for managing the transferred state-owned equity and cash income include the National Social Security Fund Council and state-owned companies established by local governments [1] - The notice exempts interest income from loans and income from the transfer of financial products from value-added tax [1] - The transfer of state-owned equity and cash income aims to improve the management of social security funds and enhance public confidence in the social security system [2] Group 2 - A temporary measure was issued in March 2024 to clarify the management of state-owned equity and cash income operations [2] - The measure broadens the investment scope for cash income, aiming to preserve and increase its value [2] - The notice also states that income from the transfer of state-owned equity and cash income will not be subject to corporate income tax, and certain stamp duties will be exempted [2]

Group 1 - The Ministry of Finance and the State Taxation Administration issued a notice to exempt value-added tax on interest and income from financial products for entities managing state-owned equity and cash income transferred to the social security fund [1] - The notice will take effect on April 1, 2024, and tax payments made before the notice can be refunded if they meet the specified criteria [1] - The responsible entities for managing the transferred state-owned equity and cash income include the National Social Security Fund Council and state-owned companies established by provincial governments [1] Group 2 - A temporary measure was jointly issued by the Ministry of Finance, the Ministry of Human Resources and Social Security, and the State-owned Assets Supervision and Administration Commission to clarify the management of transferred state-owned equity and cash income for the social security fund [2] - The transferred state-owned equity will be managed and operated by designated entities, with dividends and operational income being used to address the shortfall in basic pension insurance funds [2]

Core Viewpoint - The Chinese Ministry of Finance and the State Taxation Administration announced new tax policies to support the transfer and management of state-owned equity and cash income for the social security fund, effective from April 1, 2024 [1] Group 1: Tax Exemptions and Benefits - All interest and income from financial products obtained through loans related to the transferred state-owned equity and cash income will be exempt from value-added tax [1] - Income from the transfer of state-owned equity and cash income investments will be classified as non-taxable income for corporate income tax purposes [1] - The transfer of non-listed state-owned equity by the receiving entities will be exempt from stamp duty [1] Group 2: Securities and Transaction Tax Policies - For the transfer of listed state-owned equity and the sale of securities using cash income, a system of advance collection and subsequent refund of securities transaction stamp duty will be implemented [1] Group 3: Definition of Receiving Entities - The receiving entities are defined as those responsible for the management of transferred state-owned equity and cash income, including the National Social Security Fund Council and state-owned companies established by provincial and municipal governments [1]