21 August 2023
The Ministry of Finance, the State Taxation Administration, and China Securities Regulatory Commission (“the authorities”) issued the “Notice in relation to the Implementation Measures for Extension of Individual Income Tax Policy Related to the Shanghai-Hong Kong, Shenzhen-Hong Kong Stock Connect Mechanism and the Mutual Recognition of Mainland and Hong Kong Funds” (“the Notice”) on 21 August 2023. The authorities announced that capital gains derived by Mainland individual investors from the price differences in transfer obtained through investments in Hong Kong Stock Exchange-listed stocks via the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, as well as capital gains obtained from the sale and purchase of Hong Kong fund units through mutual recognition shall continue to be temporarily exempt from individual income tax. These Measures shall be valid until 31 December 2027.