The Ministry of Finance issued a package of tax policies on Tuesday that involved tax reductions as part of China's broader efforts to boost capital market vitality and expand opening-up.
For qualified foreign institutional investors and Renminbi qualified foreign institutional investors, the gains from trading innovative enterprises' Chinese Depository Receipts (CDR) and the dividends obtained from holding innovative enterprise CDR, will be exempted from corporate income tax. If the transaction is made through an entrusted domestic company, relevant gains will be temporarily exempted from value-added tax.
Additionally, to support the opening-up of the commodity futures market, income obtained by overseas individual investors from investing in commodity futures that are approved by the State Council such as domestic crude oil, will be temporarily exempted from personal income tax. Meanwhile, value-added tax will be temporarily exempted for transactions of bonded delivery of commodity futures approved by the State Council.
The tax policies for commodity futures trading will be effective until Dec 31, 2027.