Emerging Markets Rates and Currencies Handbook

Tax Summary – China China these interests may still be fully deductible Deductibility of FX losses • FX losses are generally deductible • Realized derivative losses are generally deductible • N/A Other Taxes/Duties • Local borrower withholds 6% VAT on interest payments to offshore lender • 0.005% Stamp Tax on loan amount • Onshore: 6% VAT on total gains from trading financial products including derivatives within a filing period • Offshore: Uncertain, prevailing market practice is no VAT • No VAT on dividend/ capital gain on sale of private equities • 0.05% Stamp Tax on sales proceeds in a Share Purchase Agreement for both the buyer and seller Comments • Requires Foreign Debt Quota • SAFE approval required • N/A • N/A • Certain lower rates apply to 1) dividend WHT when the beneficial owner of the dividend owns a certain % or higher of the capital of the paying company; or 2) capital gain WHT when owns less than a certain % of the capital of the company Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor Source: Relevant legislation, publicly available sources Country Tax Deductibility and Considerations Inter-Co Debt Offshore Derivatives Equities Bank Loans Offshore Local Borrowing