June 30 2021

Stamp Tax Law to Take Effect from July 2022

Announcement by Standing Committee of the National People's Congress

We would like to inform You of one recent piece of tax news that the Stamp Tax Law has been passed on June 10, 2021. The law will take effect from July 1, 2022, and the Interim Regulation on Stamp Duty will be abolished at the same time. The law generally maintains the current interim regulation, with appropriate simplification of tax items and rates to reduce the tax burden. We summarize main changes as below:

  1. Securities trading stamp tax will be imposed on sellers, and not on buyers, while the stamp tax rate will remain unchanged at 0.1% of the transaction value;
  2. The stamp tax rate of Processing contract, Construction engineering survey design contract and Goods transportation contract will be reduced from 0.05% to 0.03%;
  3. The stamp tax rate of Exclusive right To use trademark, Patent, Copyright and Letter of assignment of the right to use know-how will be reduced from 0.05% to 0.03%;
  4. In terms of business books, the stamp tax rate of 0.025% is only applicable to the aggregate amount of paid-in capital (share capital) and capital reserves, and stamp tax is no longer levied on licenses.

With the legislation of Stamp Tax Law, we suppose more strict supervision would be put on its compliance by tax authority. Please pay more attention.