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Shenzhen-Hong Kong Stock Connect – A New Chapter In Connecting the Capital Markets in Mainland China and Hong Kong

Shenzhen-Hong Kong Stock Connect – A New Chapter...

Hong Kong Tax Alert - Issue 14, December 2016

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Shenzhen-Hong Kong Stock Connect – A New Chapter In Connecting the Capital Markets in Mainland China and Hong Kong

The Shenzhen-Hong Kong Stock Connect allows Mainland Chinese and Hong Kong investors to trade stocks on each other’s market. 

Hong Kong investors will be temporarily exempt from tax on capital gains derived from the trading of PRC shares. Capital gains derived from the trading of Hong Kong shares by Mainland Chinese individual investors will be exempt from Individual Income Tax for three years.

Like the Shanghai programme, the Shenzhen-Hong Kong Stock Connect is a landmark in integrating and internationalizing the capital markets in Mainland China and Hong Kong.  The IIT exemption granted to Mainland investors under the Shenzhen programme will expire shortly before the end of 2019, while the IIT exemption under the Shanghai programme will expire by the end of 2017.

We expect that the Mainland China authorities will introduce tax rules before those dates to further clarify the tax issues arising under both Stock Connect programmes. 

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© 2022 KPMG Huazhen LLP, a People's Republic of China partnership, KPMG Advisory (China) Limited, a limited liability company in Mainland China, KPMG, a Macau (SAR) partnership, and KPMG, a Hong Kong (SAR) partnership, are member firms of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.

For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.

京ICP备12028186号-1
京公网安备11010102003233号

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