Xiao Chen Tax Finishing Xiao Chen Tax 08
Announcement of the Ministry of Finance and the State Administration of Taxation on the Individual Income Tax Policies for Equity Incentives of Listed Companies
Announcement No. 2 of 2024 of the Ministry of Finance and the State Administration of Taxation
In order to support the innovation and development of enterprises, the individual income tax policies related to equity incentives of listed companies are hereby announced as follows:
1. For stock options, restricted stocks and equity awards granted to individuals by domestic listed companies, individuals may pay individual income tax within a period of no more than 36 months from the date of exercise of stock options, release of restricted shares or acquisition of equity awards (hereinafter referred to as "exercise") upon filing with the competent tax authorities. If a taxpayer resigns during this period, he or she shall pay all taxes before leaving the company.
[Keywords-Individual] does not apply to indirect equity incentives on the shareholding platform, such as employees who indirectly hold the company's employee stock options, restricted stocks and equity awards through the shareholding platform, this announcement is not applicable.
[Keywords - stock options, restricted stocks and equity awards] virtual stocks, stock appreciation rights and other equity incentive methods are not applicable to this announcement.
For example, stock options are available: "grant price" or "exercise price", that is, the price at which shares can be purchased according to the stock option plan, which is generally the market price on the grant date of the stock option or the discount price of the price, or the price agreed upon according to the pre-set calculation method refers to the process by which an employee chooses to purchase shares according to a stock option plan, and the day on which an employee exercises the above rights is the "exercise date", also known as the "purchase date".
[Keywords - no more than 36 months] includes 36 months.
【Keywords-resignation】Different from the previous tax deferral policy.
【Keywords-Filing】Stock options, restricted stocks and equity awards granted to individuals by domestic listed companies shall be filed with the competent tax authorities.
2. The term "domestic listed company" mentioned in this announcement refers to a company limited by shares whose shares are listed and traded on the Shanghai Stock Exchange, Shenzhen Stock Exchange and Beijing Stock Exchange.
Keywords - domestic listed companies do not include the New Third Board, Hong Kong stocks (listed and traded on The Stock Exchange of Hong Kong Limited in the Hong Kong Special Administrative Region of the People's Republic of China) and overseas listed companies.
3. This announcement shall be implemented from January 1, 2024 to December 31, 2027, and taxpayers who exercise their rights during this period may be implemented in accordance with the provisions of this announcement. If the taxpayer exercises the right after January 1, 2023 and has not paid the full amount of the tax, it can be implemented in accordance with the provisions of this announcement, and the time limit for paying the tax in installments shall be calculated from the date of its own right.
【Keywords - Execution Time】
1. Taxpayers who exercise their rights between January 1, 2024 and December 31, 2027 can be executed according to the announcement.
2. If the taxpayer exercises his rights after January 1, 2023 and has not paid all the taxes, he or she can be executed according to the announcement, and the deadline for paying taxes in installments shall be calculated from the date of his own right.
4. The securities regulatory department shall establish an information sharing mechanism with the tax department, share the relevant information on equity incentives of listed companies with the tax department on a quarterly basis, and the financial, taxation and securities regulatory departments shall jointly implement the policy.
5. The following documents or clauses shall be repealed at the same time:
(1) Item (1) of Article 2 of the Notice of the Ministry of Finance and the State Administration of Taxation on Improving the Income Tax Policies Related to Equity Incentives and Technology Shareholding (CS [2016] No. 101).
【Remarks】Item (1) of Article 2 of Cai Shui [2016] No. 101: For stock options, restricted stocks and equity awards granted to individuals by listed companies, individuals may pay individual income tax within a period of no more than 12 months from the date of exercise of stock options, lifting of restrictions on restricted shares or obtaining equity awards after filing with the competent tax authorities. The Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning the Payment of Individual Income Tax on the Income from Stock Options of Listed Companies (CS [2009] No. 40) shall be repealed as of the effective date of this Notice.
(2) Notice of the Ministry of Finance and the State Administration of Taxation on the Policy of Installment Tax Payment for Equity Incentives in the Core Area of Zhongguancun National Independent Innovation Demonstration Zone (Haidian Park) (CS [2022] No. 16).
The announcement is hereby made.