Several Chinese agencies jointly issued guidance that suspends individual income taxation with respect to dividends distributed to "long-term individual investors" who obtained shares in listed companies by means of public offerings and market transfers and who have held the shares for a period of more than one year.
China's Ministry of Finance, State Administration of Taxation, and Securities Regulatory Commission jointly issued Cai Shui  No. 101, known in English as: “Notice on issues relating to differentiated individual income tax policies for dividends derived from listed companies.”
In addition, despite the role of China's Securities Depository and Clearing Corporation (CSDCC) in determining the amounts of tax payable, listed companies—that serve as the withholding agent and are responsible for tax withholding and reporting—still need to verify the amount of tax payable based on the relevant documentation and data provided by the CSDCC, so as to be in full compliance.
Individual investors need to understand thoroughly the new "differentiated" income tax policy for dividends and determine that amounts of income and income tax are correctly captured in their annual individual income tax returns.
Read a September 2015 report prepared by the KPMG member firm in China: New policy on PRC IIT on dividends of listed companies was promulgated to encourage long-term investments
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