RP爆发中了足球半决赛跟决赛的门票，之前也没想到半决赛居然是巴阿大战。。。

路上耽误了一下，安检进场之后已经开球了，没见到全场球迷高呼梅西的场面，遗憾。

上半场比赛场面不算特别精彩，加上一直是阿根廷进攻巴西防守，偶在北边看台看的那个郁闷，太远了。。。，狂吼了几句“巴西乌龟”，哈哈。

中场休息出去买啤酒，排队时间太长，回来到门口的时候听到欢呼声，挺紧张不知道哪边进球，不过听北看台欢呼声最响，估计是阿根廷进球了。进场之后看到了进球回放，阿圭罗，恩，不愧是老马的女婿。赞一下阿根廷大胡子教练巴蒂斯塔，四场不进球还敢坚持用，搁国内早被记者骂死被泄哑聋干涉了。。。

下半场看的爽，基本上阿根廷在北半场玩半场攻防演练，巴西偶尔搞点偷袭。梅西很好很强大，多次单挑巴西的N个后卫。球迷很High，喊完阿根廷娜接着玩泄哑聋下课哈哈。

完场之后大家久久不愿离去。阿迷们不管认识不认识，碰面就是阿根廷娜，前排坐着一家三口阿根廷的fans，偶抱起小梅西照了张像。出来直奔三里屯，旁边坐了一群从阿根廷远道而来的球迷，拉着Cynthia猛照相。路边一个老外操着纯正的北京腔一路喊“巴西傻逼”，我回了一句阿根廷牛B，这老外还真猛，啥都懂，接着喊阿根廷牛逼。。。

结账发现，酒吧真黑，百威一瓶80，nnd。

迷了阿根廷十几年，这次是最爽的一次了。04年虽然夺冠但没有踩着巴西的尸体，太遗憾。决赛是96年的重演，希望梅西阿圭罗们帮克雷斯波奥特加复仇。

[台资富士康6000万] [李嘉诚基金会3000万] [中国网通捐2500万]

[益海嘉里捐2000万] [内蒙古伊泰集团2000万] [建设银行2000万]

[中国人寿捐1600万元] [农业银行捐1500万] [工商银行捐1200万]

[中石油捐1000万元及成品油10万吨] [赛诺菲安万特捐1500万元]

[交通银行捐1200万] [海尔集团捐1000万] [民生银行捐1000万]

[泛海控股捐1000万] [联想集团捐1000万] [人保慈善捐1000万]

[上汽集团1000万] [一汽与丰田捐1000万] [上汽集团捐1000万]

[辉瑞公司捐1000万] [四川蓝光捐1000万] [中国银行捐1000万]

[中国石化1000万元] [广东中烟捐800万元] [玖龙纸业捐800万]

[招行800万] [国美700万] [中国保险集团捐350万及港币300万]

[海信集团捐600万元] [大众汽车捐600万元]

去网上看看每个企业的捐款数额，　　现在彻底明白支持国产的意义

Where is Nokia, Samsung, Sony?

Come on, Corporate China, 雄起吧！

A different version of this was first published in World Tax Daily.

China tax aspects of stock options were further clarified by a circular issued by the State Administration of Taxation. The circular, Guoshuihan [2006] No. 902 ("Circular 902"), issued on September 30, 2006, serves a supplement and amendment to the Caishui [2005] No.35 ("Circular 35") of the SAT and the Ministry of Finance.  Circular 902 clarifies various issues, confirming the attractiveness of phantom options, clarifying that only publicly listed shares will enjoy full tax preferences, narrating the allocation of option income between work inside and outside China, and addressing the taxation of publicly tradable options as well as the consequences of multiple option exercise(s) and/or multiple option plans. 

Options on Listed Shares v.s. Private Shares 

The new issued Circular 902 preserves the requirement that the underlying shares must be publicly listed in order for the option-holder to enjoy the tax preferences specified by Circular 35 (although a few preferences dating from 1998 appear to remain available in respect of options on non-listed shares). And it confirms that the shares may be publicly listed either inside or outside China, and that the shares need not be issued by the employer, and appears to confirm that the share-issuing company may be unrelated to the employer.

Deduction of Purchase Price of Stock Option

Circular 35 assumes stock options are granted freely to the employees and thus is silent on the treatment of purchase of stock option.  Circular 902 amend this unclear issue by prescribing that purchase price of stock option can be deducted for determination of the taxable income when the stock option is transferred (before exercising), or exercised.

Phantom Stock Options 

The new issued Circular 902 confirmed the availability of tax preference for phantom options.  It is provided in Circular 902 that the relevant individual income tax ("IIT") can be calculated using the method provided by Circular 35 even if the employee does not actually purchase the share but receives compensation equivalent to the difference between the fair market value and the exercise price when exercising the stock option. 

Phantom options avoid the cross-border currency procedures, controls and other barriers to China employees’ purchase of foreign shares through exercise of stock options, and thus can serve a useful vehicle for stock option plans related to Chinese employees. Attention is needed to documentation of the grant and implementation of phantom options, in order to track the Circular 902’s relevant provision, which specifies that remuneration is eligible when it is calculated by subtracting an agreed ‘exercise price’ from the market value of a listed share.

Sourcing of Income and Time Apportionment 

When the employment services to which a stock option relates have been provided in more than one tax jurisdictions, an allocation rule is necessary for purposes of determining the amount of tax should paid to each jurisdiction.  Circular 35 use a logical allocation method, to have the China-source stock option income determined by the proportion of the number of months during which employment services has been provided within China to the total number of months during which the employment services from which the stock option is derived has been provided.  But Circular 35 does not clarify how to determine the exact numbers of months related to the stock option income. 

Circular 902 further defined the number of months of employment services required from the employee as a condition of exercising an option will be deemed as the number of months related to the entitlement to stock option income, which may be generally interpreted as the sum of the months included in the vesting period, i.e., from the date of granting to the date of vesting, but the actual situation may depend on the provisions of the stock option plan.. 

Taxation of Tradable Options 

A notable development of Circular 902 is the taxation of tradable stock options.  A tradable stock option is defined as a stock option that is transferable, as agreed upon at the date of the initial grant, with quoted prices on an open market (inside or outside China).  Compared with non-tradable stock options which is not taxable at grant, the taxation of tradable options differs in the following ways: 

• Tradable stock options should be taxable at the grant date since the employee received a benefit in kind already at the granting because the tradable option formed a disposable asset with a determinate value. Circular 902 defines the taxable income as the spread between the market price and the purchase price (if any) of the option concerned.
• Gains from the transfer of such options are stated to be taxed identically to gains from the sale of shares originated from exercise of non-tradable options, which are presently exempt from tax if the shares/options are publicly listed in China, while all other share/option gains are taxed at 20%.  
• The exercise of tradable stock options will not be taxed. The exact meaning of this provision is not clear.  It may mean that exercise will not be taxed, or will not be taxed as salary income but capital gain. 

Taxation of Multiple Exercises or Multiple Option Plans 

A major tax benefit of Circular 35 is that stock option income can be spread over a period up to 12 months for calculation of tax liability. Circular 35 does not impose any limitation on the number of times that the spread method may be used (if there are multiple exercises in a tax year) but Circular 902 amended this loophole.  Under Circular 902, if an employee exercises share options more than once in a calendar year, tax will be payable during each month of exercise, and will subsequently be adjusted to the extent that all the option income derived in a year can only be spread (within up to 12 months) once in a year.  The adjustment is achieved through the following measures: 

• For the first tax month where an employee receives stock option income, his/her individual income tax payable will be determined by spreading the income over stipulated number of months, as provided in Circular 35.
• Starting the second tax month, tax payable will be calculated based on the accumulated stock option income, deducting by the tax paid in the previous tax months.  The following formula will be used for determining tax payable for each subsequent tax month:

Tax payable for the current month = (Aggregate taxable stock option income in the current tax year including the current month /stipulated number of months × applicable tax rate – quick deduction) × stipulated number of months – sum of tax paid for stock option income before the current month

This is the first adoption by China of annual (rather than monthly) calculation of individual income tax.  Though it is still based on the monthly reporting regime, the spirit behind reflect the trend of China's tax development.

If the employee's incomes involves multiple stock option plans, his taxability will be determined by 1) combine all the stock option income in the month concerned, and 2) spread the income over the weighted average months to compute the exact tax payables.

Conclusions 

As China's salaries continue to increase, enforcement efforts and penalties stiffen, and retention difficulties continue to stimulate employers' interest in deferring employee's compensation and fine-tuning employee's incentives, employee stock options and other equity-based compensations are becoming useful for more and more employers in China.  The clarification of Circular 902 makes China's tax rules on stock option more and more clear and flexible, which is likely to cement the role of real and phantom options as central pillars of many employers’ China human resource strategies.