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China Waives Income Tax for Overseas Oil Futures Investors

The Ministry of Finance has recently introduced a number of tax incentives for overseas investors interested in China’s futures markets for crude oil and other commodities. Under the new arrangements, any overseas institutional investor that does not maintain a mainland office or that has an office on the mainland but derives no income from it, is temporarily exempt from corporate income tax on any income derived from crude oil futures trading in China.

Similarly, in all instances where a foreign brokerage firm provides overseas investors with brokerage services for their crude oil futures trading in China, the commission income due to said firm will not be considered as income derived from labour services within China and is, thus, exempt from income tax. Furthermore, the income obtained by individual investors from their investments in crude oil futures trading in China is temporarily exempt from individual income tax for a three-year period, commencing from the date when said crude oil futures trading was first initiated.

The new policies came into effect as of 13 March this year.

For further details (in Chinese), please visit the following link:

Circular on Tax Policies in Support of the Opening of the Futures Market for Crude Oil and Other Commodities (Cai Shui No. 21 [2018])

Content provided by Picture: HKTDC Research
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