On 1 July 2022, the Stamp Duty Law passed by the Standing Committee of the 13th National People’s Congress at the 29th session on 10 June 2021, took effect, replacing the Interim Regulations of the People’s Republic of China on Stamp Duty (“Interim Regulations”) promulgated by the State Council on 6 August 1988.
On 29 June 2022, the Ministry of Finance (“MOF”) and the State Taxation Administration (“STA”) released Announcements No.14, No.22 and No.23 to smoothen the implementation of the Stamp Duty Law.
Compared to the Interim Regulations, there are some changes in the new Stamp Duty Law. Here we summarize 3 categories of noteworthy changes.
Newly Added Items
| No. | Newly Added Items in Stamp Duty Law |
| 1.
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For the stamp duty declaration, taxpayers shall fill in the “Breakdown of Stamp Duty Sources” based on the concluded stamp duty taxable contracts, property rights transfer documents and business account books. |
| 2. | The location for overseas organizations or individuals to pay stamp duty is specified:
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| 3. | “Taxpayers” of stamp duty is clearly defined：
Taxpayers who have concluded taxable vouchers are organizations and individuals who have direct rights and obligations with respect to the taxable vouchers.
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| 4. |
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| 5. | Where a taxable contract or taxable property right transfer document involves two or more taxpayers and the amount involved by each taxpayer is not specified, the taxation basis shall be determined based on the amount listed in the taxable vouchers averagely shared by the taxpayers (excluding the specified VAT amount). |
| 6. | Where the amount listed in the taxable contract and taxable property right transfer document is inconsistent with the actual settlement amount, and the amount listed in the taxable voucher is changed, the amount after the change shall be taken as the taxation basis.
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| 7. | Where the calculation error of VAT amount set out in a taxable voucher of a taxpayer results in the reduction or increase of the taxation basis of the taxable voucher, the taxpayer shall adjust the VAT amount set out in the taxable voucher in accordance with provisions and re-determine the taxation basis of the taxable voucher.
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Updated Items
| No. | Updated Items in Stamp Duty Law | Note |
| 1. | Where the amount is not specified in the taxable contract or the property rights transfer document, but is determined upon subsequent actual settlement, taxpayers shall declare the preparation of the taxable contract or the property rights transfer document in the first tax declaration period when the taxable contract or the property rights transfer document is concluded and calculate, declare and pay the stamp duty based on the actual settlement amount in the tax declaration period following the actual settlement. | In the Interim Regulations, taxpayers shall be subject to stamp duty of 5 yuan first and then declare and pay the stamp duty based on the actual settlement amount in the tax declaration period following the actual settlement. |
| 2. | Stamp duty is levied on a quarterly or yearly basis or based on each transaction. | In the Interim Regulations, Stamp duty is levied based on each transaction or on a monthly basis. |
| 3. | Many preferential stamp duty policies are repealed or void, but 46 documents and clauses remain implemented. | See appendixes of Announcement No.23.
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| 4. | The calculation basis of stamp duty is updated as follows:
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The calculation basis is excluding the VAT amount specified. |
Updated Taxable Documents and Tax Rates
| No. | Type | Taxable Document | Scope | Tax Rate | Note |
| 1. | Contract | Financial lease contract | / | 0.005% of the lease contract | Newly added |
| Purchases and sales contracts | Contracts for purchasing and selling movables except those made by individuals | 0.03% of the value purchases | Scope updated | ||
| Contracts for work | / | 0.03% of contracted amount | Tax rate reduced from 0.05% of contracted amount | ||
| Construction project contracts | / | 0.03% of contracted amount | Tax rate reduced from 0.05% of contracted amount | ||
| Transportation contracts | / | 0.03% of the transportation fee | Tax rate reduced from 0.05% of the transportation fee | ||
| Technology contracts | Not including contracts for transferring the right of use of patent and know-how | 0.03% of the price, remuneration, or royalty | Scope updated | ||
| Leasing contracts | / | 0.1% of the lease contract | Any amount less than RMB 1 to be stamped as RMB 1 removed | ||
| Safekeeping contract | / | 0.1% of the safekeeping fees | Separated from the previous “Warehousing and safekeeping contract” | ||
| Warehousing contract | / | 0.1% of the warehousing fees | |||
| Property insurance contracts | Not including reinsurance contract | 0.1% of the insurance expenses | Scope updated | ||
| 2. | Property transfer documents | Land usage right granting document | / | 0.05% of the amount indicated | Changed from “land usage right granting contract” |
| Land usage right, ownership of buildings and structures, such as houses transfer documents | Not including the transfer of land contacting and management right or land management right | 0.05% of the amount indicated | Scope further clarified and defined | ||
| Equity transfer document | Not including those security transactions subject to stamp duty | 0.05% of the amount indicated | Newly added | ||
| Exclusive right to use trademark, copyright, patent, the right to use know-how transfer document | / | 0.03% of the amount indicated | Tax rate reduced from 0.05% of the amount indicated | ||
| 3. | Accounting book | / | / | 0.025% of the total amount of the paid-in capital (share capital) and capital reserves | The calculation basis updated to be “the paid-in capital (share capital) and capital reserves only”. The other accounts will no longer incur stamp duty. Tax rate reduced by half. |
| 4. | Security transactions | / | / | 0.1% of the volume of transactions | Newly added |
