Since 1st October 2012, security brokers shall levy individual income tax on the balance of commission income earned from Security Company, after deduction of business tax and surcharges actually paid and the expenditures relating to business development, which is limited to 40% of commission income, under tax tem of income from remuneration for personal services.
Lee & Lee Associates Insights: The implementation of the above notice will reduce the tax burden of security brokers and subsequently may, to a certain degree, offer support to the stableness of security brokers business. Due to the important position of security brokers in the security market and the relating administration system is still new for the country, more detail standards may be expected on the administration of such profession in the future.
Relevant Rule: ‘Notice of the State Administration of Taxation on Levying Individual Income Tax on Security broker’s Commission Income) ’’ Guo Shui [2012], No. 45
