Capital gains tax provisions on QFII stalk China A-share ETFs

Renminbi - China's currency

Fund managers active in China A-share exchange traded funds (ETFs) say part of the reason for their underperformance versus the underlying index tracked by the fund is linked to a 10% provision they are making for a prospective capital gains tax by Chinese tax authorities. Such a levy, however, has not been enforced in China, despite talk of its introduction surfacing in the markets since around 2008.

Fears about the introduction of a new capital gains withholding tax on qualified foreign instit

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