On 17 November 2014, the rules provided under Circular (2014) 81 regarding taxation of gains and dividends from the Shanghai-Hong Kong Stock Connect program went into effect. The Connect program allows non-Chinese investors to invest in certain Shanghai listed A shares through Hong Kong securities firms, and Chinese investors to invest in certain Hong Kong listed shares through Chinese securities firms. The following outlines the main rules concerning Chinese tax liabilities: Hong Kong and Foreign Investors Hong Kong and foreign investors are temporarily exempt from Chinese income tax on gains from the sale of A shares through the program. Hong...