The State Administration of Taxation ("SAT") has recently issued the Announcement on the Follow-up Administration after the Implementation of Canceling the Examination and Approval of Three Individual Income Tax Matters (the "Announcement") with immediate effect.
The Announcement contains provisions on the follow-up administration after canceling the "examination and approval of temporary exemption of individual income tax ("IIT") for promoting the transformation of scientific and technological achievements", "examination and approval of having difficulties in paying IIT for income earned from discounts or subsidies through obtaining stock options or subscribing for stocks", and "examination and approval of how IIT shall be imposed on law firms". In particular, according to the Announcement, scientific research institutions, institutions of higher education or award-winners who have their employment-based scientific and technological achievements transformed to shares or investment proportions in accordance with the Circular of the State Administration of Taxation on Individual Income Tax Issues concerning the Transformation of Scientific and Technological Achievements and other relevant provisions shall, within 15 days of the month following the month they are awarded (win) the prizes, file with the competent tax authorities for the record with the Record-filing Form of Temporary IIT Exemption for Transformation of Scientific and Technological Achievements submitted.