New business tax treatment on the transfer of fin... | KPMG | CN

New business tax treatment on the transfer of financial commodities

New business tax treatment on the transfer of fin...

China Tax Alert: Financial Service Focus - Issue 1, December 2013  

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 New business tax treatment on the transfer of financial commodities

The State Administration of Taxation (SAT) recently issued SAT Announcement [2013] No. 63 (Announcement 63) which modified the policy of Business Tax (BT) treatment on the transfer of financial commodities. Pursuant to Announcement 63, the transfer of financial commodities will no longer be classified into four categories of stocks, bonds, foreign exchange and others. Instead, they will be consolidated into one category, i.e. the financial commodities. Trading gains and losses of different categories of financial commodities can now be offset across different categories within the same BT reporting period. 

While this modification of BT policy is favorable for taxpayers, however, as the effective date of Announcement 63 is 1 December 2013, it will give rise to some practical uncertainties.  

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