New Announcement Regarding the Individual Income Tax of Investors

《国家税务总局关于个人投资者收购企业股权后将原盈余积累转增股本个人所得税问题的公告》 (07/05/2013)

For the purpose of further implementing the Individual Income Tax Law and other related rules, the State Administration of Taxation released the Announcement on Certain Issues Regarding the Individual Income Tax on the Increase of Share Capital Converted from the Original Accumulated Surplus after Acquisition of the Enterprise Equity by Individual Investors (Income Tax Announcement) on May 7, 2013, which took effect on June 7, 2013.

a) Where one or more individual investors (new shareholders) purchase 100% equity from an enterprise and then would like to use the accumulated surplus to increase share capital after the acquisition, given that the book value of the accumulated surplus (including capital reserve, surplus reserve and undistributed profits) of the acquiree, instead of being converted to the share capital before the acquisition, has been included in the equity transfer price with related income tax paid at the time of transaction, the individual income tax should be subject to the following principles:

• If the transaction price of the equity acquisition is not less than the value of net assets of the acquired enterprise, and has included the original accumulated surplus, then no individual income tax will be levied on the increased portion of the capital share converted from the accumulated surplus.
•  If the transaction price of the equity acquisition is less than the value of net assets of the acquired enterprise, for the increased portion of the capital share converted from the accumulated surplus that has been included in the transaction price, no individual income tax will be levied; however, for the increased portion of the capital share converted from the accumulated surplus that has not been included in the transaction price, individual income tax will be levied as “interests, dividends and bonuses.” 
According to the Income Tax Announcement, new shareholders are required to convert the taxable part of the accumulated surplus into share capital before converting the tax exempt part, if the transaction price of the equity acquisition is less than the value of net assets of the acquired enterprise. 
b) When new shareholders transfer these newly acquired entities, the value of the equity share shall be the combination of the transaction price and related taxes they have actually paid during the acquisition. 
c) After the equity transaction and increase of share capital, the enterprise shall report relevant matters to competent tax authorities within 15 days of the following month since the conversion, including the changes in shareholders and equities, the accumulated surplus prior to the equity transaction, and the increase in share capital converted from the previous accumulated surplus, as well as the tax collection status.

‐ Announcement of the State Administration of Taxation on Certain Issues Regarding the Individual Income Tax of Investors where the Share Capital is Increased with the Original Accumulated Surplus after the Acquisition of Enterprise Equity by Individual Investors


‐ 《国家税务总局关于个人投资者收购企业股权后将原盈余积累转增股本个人所得税问题的公告》

‐ Issuing Authority: the State Administration of Taxation

‐ Date of Issuance: May 07, 2013 / Effective date: June 07, 2013

MOFCOM Approved Glencore’s Acquisition of Xstrata with Restrictive Conditions

商务部附加限制性条件批准嘉能可收购斯特拉塔 (16/04/2013)

Glenore International plc (Glencore) is the world’s largest supplier for non‐ferrous metals and minerals. Glencore owns seven entities engaged in trade and warehousing business in China. Xstrata plc (Xstrata) is the fifth largest mining group and metal company as well as the fourth copper producer in the world. Xstrata sells coking coal, thermal coal, iron alloy, refined copper and owns a stainless steel production joint venture and two entities engaged in trade operations in China. Glencore currently holds 33.65% and will hold 100% of Xstrata’s shares after the acquisition.

Based on the examination on concentration of undertakings, MOFCOM concluded that the acquisition will eliminate Xstrata’s presence in the Chinese market, who is a significant competitor of Glencore, significantly increase the mineral resources controllable by Glencore, strengthen Glencore’s integration over related industries and enhance Glencore’s control over the market. As a result, MOFCOM approved Glencore’s acquisition of Xstrata with restrictive conditions including:

a) Copper Concentrate Market

•  Divestiture of the copper concentrate assets: Glencore shall divest all the interests Xstrata holds in a Peru copper project after completion of the acquisition.
•  Keeping the trading conditions for copper concentrate unchanged: Glencore shall provide the Chinese clients with offers for long‐term copper concentrate contracts no less than the agreed minimum volume from 2013 to 2020. 
b) Zinc Concentrate and Lead Concentrate Market: Glencore shall continue to provide the Chinese clients with offers for long‐term and spot zinc concentrate and lead concentrate contracts. The offer conditions shall be fair and reasonable.