Stocks News
- Revised tax net targets gains from stocks, real estate
Date: 19-Nov-2007 Sources: (Xinhua Online)
BEIJING, Nov. 17 -- High income earners will have to declare profits from stocks and property transactions when they file tax returns next year.
The State Administration of Taxation also said expatriates will be entitled to some new deductions.
The administration has added stocks and real estate income on next year's tax form for high-income earners - those who earn more than 120,000 yuan (16,151 U.S. dollars) a year.
From this year the State Administration of Taxation has ruled that high-income earners must file personal income statements helping to ensure that those who earn the most pay the most.
The state tax authority has already asked high-income earners to list profits from stocks and real estate in the 'gains from assets' section but the tax forms did not ask for the gains to be listed separately.
Joyce Xu, a tax partner at Deloitte, said the move was another step towards improving the tax reporting system.
Stocks and real estate are two major sources of income as well as favorite conversation subjects.
'China wants to discover exactly how much these two items account for in the total of personal earnings,' Xu said.
Earnings from the A-share market are exempt from tax but earnings from real estate transactions are subject to a 20- percent tax on the profits.
The state tax authority has added some deductions for employers of expatriates. Non-cash subsidies and expenses for housing, relocation, dining and laundry can now be listed on the new form for deductions.
Those who suffer severe financial loss because of a disaster can also be exempted from tax from next year, the authority said.
About 1.63 million people, or 96 percent of those earning more than 120,000 yuan a year, filed their tax returns earlier this year, China's first annual tax-return filing database estimates, the State Administration of Taxation said on its Website.
It is estimated that there are 1.7 million people who earn more than 120,000 yuan a year on China's mainland.
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