China's Levy Of Capital Gains Tax System

Capital gains taxation as an important tax in stock market adopted by lots of countries is a kind of tax which taxes revenue realized through equity trading. There exists huge divergence, however, not only in principle but also in practice. Capital gains taxation is not a stable tax, nevertheless. To cultivate and stimulate the healthy development of equity market; it has not been started yet in China since the establishment of stock market. Weather adopting capital gains tax has been concentrated and is a sensitive issue in the stock market. In the past few years. Consequently, the stock market disturbed each time and it induces drastic arguments of scholars and investors and the relating government sector. Seeing from the tendency, it is necessary to adopt capital gains tax for china stock market, and how and when to adopt is a key problem. In modern society, the status of stock market is becoming more and more important, furthermore, effects of adopt capital gains tax are extensive and complex. This paper analyzes economic effects of capital gains tax on equity trading systematically, references approaches performed in other countries, combines the truth of our country, presents the system design in our country and analyzes the difficult point to adopt capital gains tax and finally present relating solutions and suggestions.The first part outlines the status of our stock market and the significance of stock capital gains tax. Summary about whether or not tax on capital gain, and the economic effects if the introduction of capital gains tax. Chapter 2 primarily provides the definitions for capital gains tax and capital gains tax on equity. Chapter 3:Firstly, provides the rationale for adopting capital gains tax on equity trading, which contains comprehensive income and tax differential theory. Second, analyzes effects of capital gains tax on equity trading, price, volatility, investment policy, and so on.Third, makes a comparison among most countries and areas tax system of capital gains on equity trading, and then propose suggestions to our country. Chapter 4 primarily analyzes the necessity and feasibility to adopt capital gains tax on equity trading. From the point of necessity, primarily included making securities tax system imperfect, and stimulating the healthy development of stock market; adjusting income allocations, approaching international regulations and preserving country's tax benefit. Electronic for equity trading and system establishment and the informatization establishment for taxation collection and management provide feasibility for adopting capital gains tax. Chapter 5 state the design system to adopt capital gains tax from the deciding of taxpayer, the choosing of taxing methods, design of tax rate, identifying of taxing range, identifying of tax bases, dealing with of capital losses and preferential policies. Chapter 6 primarily presents difficulties to adopt capital gains tax on equity trading. Simultaneously proposes corresponding solutions. To alleviate the attack, we may make investors be aware of the tax through positive propagating; as enacting lower tax rate, remove stamp tax on equity trading; further develop institutional investors, follow the non-retroactive character when adopt capital gains tax. Combine macroeconomic situations and the performance of stock market to determine the adopting opportunity.