China MOF Issues Announcement Clarifying VAT Policy for Transfer of Free Stocks

The Chinese Ministry of Finance Sept. 29 issued Announcement No. 40, clarifying the VAT policy for the transfer of free stocks. The clarification includes: 1) the obligation of transferors to calculate and pay VAT at the purchase price of stocks according to the provisions of the transfer of financial products; and 2) the option for financial institutions issuing loans to small and medium-sized entities to choose either the the one-year or the five-year or more loan market quotation rate for interest income. The announcement enters into force the same date. [China, State Administration of Taxation, 09/29/20]

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