On 3 June 2015, China's Ministry of Finance and State Administration of Taxation issued Public Notice (2015) 40, which clarifies the special tax treatment for qualified internal equity and asset transfers as provide for by Circular (2014) 109, released 8 January 2015.
Prior to Circular 109, an internal transfer of equity or assets was generally subject to recognition of all gains or losses in the tax year of the transfer. With Circular 109, such transfers are eligible for special tax treatme…