Core Viewpoint - The article discusses the announcement by the Ministry of Finance, State Administration of Taxation, and China Securities Regulatory Commission regarding the tax policies for innovative enterprises issuing depositary receipts (CDRs) in China, which will be effective from January 1, 2026, to December 31, 2027 [2]. Group 1 - From January 1, 2026, to December 31, 2027, individual investors will be exempt from personal income tax on the capital gains from the transfer of innovative enterprise CDRs [2]. - The dividend income from holding innovative enterprise CDRs will be subject to a differentiated personal income tax policy, following the relevant regulations outlined in previous notices [2]. - Innovative enterprises' CDRs are defined as securities issued in China that represent the rights to overseas underlying securities, in accordance with the pilot program established by the State Council [4]. Group 2 - Corporate investors will be subject to the same tax policies as those for stock transfers and dividend income for innovative enterprise CDRs, meaning they will also be exempt from corporate income tax [4]. - Publicly offered securities investment funds will not be subject to corporate income tax on capital gains and dividend income from innovative enterprise CDRs [4]. - Qualified foreign institutional investors (QFII) and Renminbi qualified foreign institutional investors (RQFII) will also be exempt from corporate income tax on capital gains and dividend income from innovative enterprise CDRs, treated as income from the underlying stocks [4].

Core Viewpoint - The Ministry of Finance, State Administration of Taxation, and China Securities Regulatory Commission announced tax policies for the trial phase of domestic issuance of depositary receipts (CDRs) for innovative enterprises, effective from January 1, 2026, to December 31, 2027 [1] Group 1 - From January 1, 2026, to December 31, 2027, individual investors will be exempt from personal income tax on the capital gains from the transfer of CDRs of innovative enterprises [1] - A differentiated personal income tax policy will be implemented for dividends received by individual investors holding CDRs, following the guidelines set forth in previous notices from the Ministry of Finance and State Administration of Taxation [1] - Innovative enterprises are required to withhold and pay taxes on behalf of individual investors through their domestic depositary institutions, which must also file detailed reports to the local tax authorities [1] Group 2 - Individual investors can offset taxes already paid on dividends abroad against their personal income tax liabilities, in accordance with personal income tax laws and relevant bilateral tax agreements [1]

Core Viewpoint - The announcement by the Ministry of Finance and other departments extends tax policies related to the pilot phase of domestic issuance of Depositary Receipts (CDRs) for innovative enterprises from January 1, 2026, to December 31, 2027, to support the innovation-driven development strategy [1]. Individual Income Tax Policy - From January 1, 2026, to December 31, 2027, individual investors will be exempt from personal income tax on capital gains from the transfer of innovative enterprise CDRs [1]. - A differentiated personal income tax policy will apply to dividends received by individual investors from holding innovative enterprise CDRs, following existing regulations [2]. Corporate Income Tax Policy - Corporate investors will be subject to the same tax exemption policies for capital gains and dividends from innovative enterprise CDRs as those for stocks [3]. - Publicly offered securities investment funds will not be subject to corporate income tax on capital gains and dividends from innovative enterprise CDRs [3]. - Qualified Foreign Institutional Investors (QFIIs) and Renminbi Qualified Foreign Institutional Investors (RQFIIs) will also be exempt from corporate income tax on capital gains and dividends from innovative enterprise CDRs [3]. Value-Added Tax Policy - Individual investors will be exempt from value-added tax on capital gains from the transfer of innovative enterprise CDRs [4]. - Institutional investors will be subject to the financial product transfer tax exemption policy for capital gains from innovative enterprise CDRs [5]. - Publicly offered securities investment fund managers will be exempt from value-added tax on capital gains from the transfer of innovative enterprise CDRs during fund operations [5]. Other Relevant Matters - Innovative enterprise CDRs refer to securities issued in China that represent the rights to overseas underlying securities, in accordance with the relevant pilot enterprise regulations [6].

Core Viewpoint - The announcement by the Ministry of Finance, State Taxation Administration, and China Securities Regulatory Commission extends the tax policies related to the trial phase of domestic issuance of depositary receipts (CDRs) for innovative enterprises, providing tax exemptions for various investors on capital gains and dividend income from CDRs [1] Group 1: Tax Policies for Enterprises - Enterprises transferring capital gains from innovative enterprise CDRs and holding dividends from these CDRs will be exempt from corporate income tax according to the regulations for capital gains and dividend income from stock transfers [1] - Publicly offered securities investment funds, including both closed-end and open-end funds, will not be subject to corporate income tax on capital gains and dividend income from the transfer of innovative enterprise CDRs, following the tax policies applicable to public funds [1] Group 2: Tax Policies for Qualified Foreign Institutional Investors - Qualified Foreign Institutional Investors (QFII) and Renminbi Qualified Foreign Institutional Investors (RQFII) will also be exempt from corporate income tax on capital gains and dividend income from the transfer of innovative enterprise CDRs, treating these as gains and income from the underlying stocks that issued the CDRs [1]