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there is another good news.

the ministry of finance website announced on the evening of september 4 that the ministry of finance and the state administration of taxation recently issued the "announcement on stamp duty policies concerning enterprise restructuring and reorganization and institutional restructuring", which will be effective from october 1, 2024 to december 31, 2027.

the industry believes that this policy aims to support the restructuring and reorganization of enterprises and public institutions, further stimulate the endogenous motivation and innovation vitality of various business entities, and promote high-quality economic and social development; it will help promote the optimization and upgrading of the economic structure, while reducing the tax burden of enterprises and improving corporate efficiency. the new policy is conducive to improving the profitability of enterprises, promoting corporate restructuring, and enhancing market confidence.

(photo from hailuo)

// new stamp duty policy is coming //

according to the announcement, the total amount of paid-in capital (share capital) and capital reserve recorded in the newly used business books of new enterprises established during the process of enterprise restructuring and reorganization and institutional restructuring isthe part that has already paid stamp duty is no longer subject to stamp duty, and the part that has not paid stamp duty and the newly added part shall be subject to stamp duty according to regulations.

in addition, the total amount of paid-in capital (share capital) and capital reserve newly added from the conversion of corporate debt into equity shall be subject to stamp duty in accordance with regulations.for the conversion of debt into equity that occurs in a restructuring project approved by the state council, the total amount of the debtor's paid-in capital (share capital) and capital reserves increased due to the conversion of debt into capital are exempt from stamp duty.

the implementation of this policy will help reduce the tax burden of enterprise restructuring and reorganization and public institution restructuring, reduce enterprise costs and improve enterprise efficiency. at the same time, the total amount of paid-in capital (share capital) and capital reserve increased after evaluation during the process of enterprise restructuring and reorganization and public institution restructuring shall also be subject to stamp duty in accordance with regulations. this will help promote the smooth progress of enterprise restructuring and reorganization and public institution restructuring, and promote the optimization and upgrading of economic structure.

in addition, the announcement also clarified that for various taxable contracts signed before the restructuring of enterprises and institutions but not yet fully performed, if the rights and obligations of the original contract are inherited by the restructured and reorganized entity and the tax calculation basis of the original contract is not changed,if stamp duty has been paid before restructuring and reorganization, stamp duty no longer needs to be paid.this regulation will help reduce the tax burden on enterprises and promote the performance of contracts and the smooth progress of transactions.

caixin quoted a tax expert who said that compared with the stamp duty preferential policy in 2003, a highlight of this announcement is that it cancels the restriction that the policy must be applied to "enterprises approved by the people's government at or above the county level and the competent department of the enterprise". because of this restriction, the preferential stamp duty policy was only available to state-owned enterprises, and could not be applied to private enterprises. the announcement now cancels this restriction, which is actuallythe scope of application of preferential stamp duty policies has been expanded.

// what impact will the new policy have on the stock market? //

the agency believes that the impact of the "announcement on stamp duty policies for enterprise restructuring and reorganization and institutional restructuring" on the stock market is mainly reflected in the following aspects:

reducing the burden on enterprises：

the new policy stipulates that new enterprises established during the process of enterprise restructuring and reorganization and institutional restructuring will no longer be subject to stamp duty on the total amount of paid-in capital (share capital) and capital reserves recorded in their newly used business books, which has previously paid stamp duty. this measure will reduce the tax burden of enterprises, improve their profitability, and thus have a positive impact on listed companies.

facilitating corporate restructuring:

the new policy exempts stamp duty on the total amount of paid-in capital (share capital) and capital reserves increased after evaluation during the process of enterprise restructuring and reorganization and institutional restructuring. this will encourage enterprises to reorganize, improve resource allocation efficiency, enhance market competitiveness, and thus have a positive impact on the stock market.

improve market confidence:

the introduction of the new policy reflects the government's support for enterprises and is conducive to improving market confidence. investors are more optimistic about the future development prospects of enterprises, thus driving the stock market up.

impact on related industries:

the new policy stipulates that for new enterprises established in the process of enterprise restructuring and reorganization and public institution restructuring, the portion of the total amount of paid-in capital (share capital) and capital reserves recorded in their newly used business books that has previously paid stamp duty will no longer be subject to stamp duty.this will be beneficial to the development of related industries such as finance, real estate, etc.