On November 16, 2012, the Ministry of Finance(the "MOF"), the State Administration of Taxation (the"SAT"), and the China Securities Regulatory Commission jointly issued the Notice on the Implementation of the Differentiated Individual Income Tax Policy on Dividends and Bonuses Received from Listed Companies (Caishui [2012]No.85, hereinafter referred to as the "Notice"). The Notice provides that the individual income tax("IIT") on dividends and bonuses received from listed companies will be levied differently based on the relevant stock-holding periods. For stocks with a holding period of no more than one month, all the dividends and bonuses shall be subject to the IIT. For stocks with a holding period above one mouth but not exceeding one year, 50%25 of the income shall be subject to the IIT. For stocks with a holding period of more than one year, 25%25 of the income shall be subject to the IIT, and the applicable IIT rate will remain at 20%25 as stated in the Individual Income Tax Law (the "New Tax Policy").The Notice will take effect on January 1, 2013.
