On December 7, 2014, the State Administration of Taxation has issued the Measures for Administration of Individual Income Tax on Income Derived from Equity Transfer (for Trial Implementation) (the "Measures"). The Measures, once taking into effect on January 1, 2015, will abolish the Notice of the State Administration of Taxation on Strengthening Administration of the Collection of Individual Income Tax on Income Derived from Equity Transfer (Guo Shui Han [2009] No. 285), and the Announcement of the State Administration of Taxation on Issues Relating to Determining Verifying the Taxation Basis for Individual Income Tax on Income Derived from Equity Transfer (Announcement of the State Administration of Taxation [2010] No. 27) (the “Announcement”).

The Measures have specified considerable rules regarding individual income tax on income derived from equity transfer which are listed as follows, among others:

On December 2, 2014, the State Administration of Taxation (“SAT”) issued the Administrative Measures on the General Anti-Avoidance Rule (for Trial Implementation) (the “Measures”), which will be effective on February 1, 2015.

Although principles on the application of general anti-avoidance rules (“GAAR”) were included in Corporate Income Tax Law of People’s Republic of China (“CIT Law”), Detailed Implementation Rules of CIT Law and the Implementation Measures on Special Tax Adjustments (for Trial Implementation), specific administrative measures regarding GAAR application such as the operation procedures and enforcement standards were absent for a long time until the release of the Measures.