The Zhitong Finance App learned that on August 28, the Ministry of Finance, the State Administration of Taxation, and the China Securities Regulatory Commission issued a notice on regulating the personal income tax policy for the transfer of restricted shares of listed companies. Income obtained by individuals from the transfer of restricted shares of listed companies is subject to personal income tax at a rate of 20% according to “income from property transfer”. The restricted shares referred to in this announcement include restricted shares stipulated in section 2 of the “Notice of the Ministry of Finance, the State Administration of Taxation, and the Securities Regulatory Commission on Issues Relating to the Levy of Personal Income Tax on Proceeds from the Transfer of Restricted Shares of Listed Companies” (Finance and Taxation (2009) No. 167), as well as transfers and transfers of shares generated after the ban was lifted and registered as shares after the implementation of this announcement. Where restricted shares are delivered, transferred, or reduced, the securities registration and settlement company shall adjust the original cost of restricted shares according to the transfer, transfer, and reduction ratios.
The full text is as follows:
Announcement on Regulating Personal Income Tax Policies for the Transfer of Restricted Shares of Listed Companies
Ministry of Finance, State Administration of Taxation, China Securities Regulatory Commission Announcement No. 26 2026
In order to regulate the personal income tax policy for the transfer of restricted shares of listed companies, the relevant matters are hereby announced as follows:
1. Income obtained by individuals from the transfer of restricted shares of listed companies shall be subject to personal income tax at a rate of 20% according to “income from property transfer”. The restricted shares referred to in this announcement include restricted shares stipulated in section 2 of the “Notice of the Ministry of Finance, the State Administration of Taxation, and the Securities Regulatory Commission on Issues Relating to the Levy of Personal Income Tax on Proceeds from the Transfer of Restricted Shares of Listed Companies” (Finance and Taxation (2009) No. 167), as well as transfers and transfers of shares generated after the ban was lifted and registered as shares after the implementation of this announcement.
Where restricted shares are delivered, transferred, or reduced, the securities registration and settlement company shall adjust the original cost of restricted shares according to the transfer, transfer, and reduction ratios.
2. Listed companies shall, in accordance with the provisions of the “Notice of the Ministry of Finance and the State Administration of Taxation on Personal Income Tax Issues Relating to Individual Transfer of Restricted Shares of Listed Companies” (Finance and Taxation (2011) No. 108), when applying to a securities registration and settlement company for initial share registration, submit detailed information on the original cost of restricted shares provided by individual shareholders of restricted shares, as well as an authentication report issued by intermediaries such as accounting firms and tax agent firms.
After the implementation of this announcement, if a listed company does not declare the original cost of restricted shares in accordance with regulations when applying for initial share registration, the securities institution will apply a 20% tax rate to calculate withholding personal income tax according to the full amount of revenue from the transfer of restricted shares. After withholding the tax withheld, the taxpayer may process a liquidation declaration in accordance with the provisions of Article 3 of this Notice.
If a listed company has completed initial registration of shares and has not declared the original cost of restricted shares before the implementation of this announcement, when individuals transfer restricted shares, the securities institution withholds and prepays personal income tax, and may determine the original cost value and reasonable taxes according to 15% of the restricted share transfer income. After withholding the withheld tax, the taxpayer shall process a liquidation declaration in accordance with the provisions of Article 3 of this Notice.
3. If the taxpayer's taxable amount calculated based on the actual transfer income and actual cost of restricted shares is greater than the amount of tax withheld by the securities agency, or less than the amount of tax withheld by the securities agency and applying for a tax refund, the taxpayer shall provide the competent tax authority with relevant information such as the original cost of the restricted shares and process a liquidation declaration before June 30 of the year following the transfer of restricted shares to refund more or less tax compensation.
4. The listed company referred to in this announcement refers to a company limited by shares listed and traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange.
5. Individuals transfer original shares of companies listed on the National Small and Medium Enterprises Share Transfer System (hereinafter referred to as listed companies) and companies listed on the Beijing Stock Exchange to pay personal income tax in accordance with the provisions of this Notice.
Prior to the implementation of this announcement, if a listed company's original shares were initially registered and not declared at the original cost, the securities institution withholds and withholds personal income tax and withholds personal income tax and can approve the original cost and reasonable taxes according to 15% of the original share transfer income. After withholding the withheld tax, the taxpayer shall process a liquidation declaration in accordance with the provisions of Article 3 of this Notice.
6. This Notice shall be implemented from the date of publication. If the previous regulations are inconsistent with the provisions of this Notice, they shall be implemented in accordance with the provisions of this Notice.
We hereby announce it.
This article was selected from the “Ministry of Finance Official Website”; Zhitong Finance Editor: Huang Xiaodong.