December 20 2022

Shanghai two authorities implement joint management on IIT of individual equity transfer

The Shanghai Municipal Administration of Taxation and the Shanghai Municipal Administration of Market Regulation jointly issued the Notice on Further Improving the Service of Inspection of Individual Income Tax Payment Certificates for the Registration of Equity Change. The Notice will come into force on December 20, 2022.

Where an individual transfers the equity to go through the registration of the change of shareholders, the withholding agent or taxpayer shall, before going through the registration of the change with the market supervision and administration department, go through the tax declaration with the competent tax authorities of the place where the invested enterprise is located in accordance with the law.

The two departments in Shanghai implement the automatic interaction mechanism of individual equity transfer information. The market entity registration authority shall handle the registration of the change of equity according to the Form of Tax Payment for the Change of Equity of Natural Person Shareholders provided by the tax authority.