On 8 January 2015, China's Ministry of Finance and State Administration of Taxation released Circular (2014) 109. Changes introduced in Circular 109 include providing special tax treatment for qualified internal share and asset transfers, and lowering of the threshold percentage of total shares or assets for non-taxable general reorganizations.
Internal Share and Asset Transfers
Prior to Circular 109, an internal transfer of shares or assets was generally subject to recognition of all gain…