The Resource Investing in China's equity market - PRC tax implications for foreign investors

Investing in China's equity market - PRC tax implications for foreign investors

Label
Investing in China's equity market - PRC tax implications for foreign investors
Title
Investing in China's equity market - PRC tax implications for foreign investors
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Subject
Language
eng
Summary
The aim of this article is to examine the various implications of PRC tax policies with respect to the participation of foreign investors in the Qualified Foreign Institutional Investors (QFII), Renminbi-Qualified Foreign Institutional Investors (RQFII), Shanghai-Hong Kong Stock Connect (SHSC) and Mutual Recognition of Funds (MRF) schemes. Such tax implications include income taxes (enterprise income tax for foreign institutional investors and individual income tax (IIT) for foreign individual investors), business taxes (BTs) and stamp duties. For income taxes, depending on the nature of the income, there can be capital gains and withholding taxes. For indirect taxes such as the BT, there can be other concerns, especially because China is currently in the midst of a final push for the reform of indirect taxes. The remainder of this article is structured as follows. The authors first introduce a brief history of China's stock market and its distinct characteristics, followed by a description of the various alternatives for foreign investors to participate in this stock market. They then focus on the PRC tax implications for foreign investors who participate through schemes launched by the Chinese government, namely, the QFII, RQFII, SHSC and MRF schemes. Next, they present their observations and offer advice to foreign investors on how to navigate the perplexing PRC tax web. Their conclusions are presented in the final section
Citation source
In: International tax journal. - Chicago. - Vol. 42 (2016),
http://library.link/vocab/creatorName
  • Cheng, S
  • Shi, S
  • Yip, R.W.Y
Geographic coverage
Asia
Language note
English
http://library.link/vocab/subjectName
  • foreign investment
  • tax policy
  • stock exchange
Label
Investing in China's equity market - PRC tax implications for foreign investors
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Publication
Label
Investing in China's equity market - PRC tax implications for foreign investors
Publication

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