Depends on the circumstances. If it is transferred to an individual, then the balance of the equity transfer income minus the original value of the equity and reasonable expenses is the taxable income. The income from the transfer of property is subject to personal income tax, including: the income from the transfer of securities, equity, shares of property in partnerships, real estate, machinery and equipment, vehicles and ships, and other property acquired by individuals. Article 6 of the Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China (PRC) stipulates the scope of individual income under the Individual Income Tax Law: (1) Income from wages and salaries refers to the wages, salaries, bonuses, year-end raises, labor bonuses, allowances, subsidies, and other incomes obtained by an individual in connection with his/her employment or occupation. (b) Income from remuneration for labor services refers to the income derived by an individual from performing labor services, including design, decoration, installation, drafting, laboratory, testing, medical, legal, accounting, consulting, lecturing, translating, reviewing, painting, calligraphy, sculpture, film and television, audio and video recording, performance, acting, advertisement, exhibition, technical services, referral services, brokerage services, agency services, and other income derived from labor services. (iii) Income from manuscripts refers to the income received by an individual for his/her works published in the form of books, newspapers and magazines, and so on. (d) Royalty income refers to income derived from the provision of the right to use patent rights, trademark rights, copyrights, non-patented technologies and other franchises by an individual; the income derived from the provision of the right to use copyrights excludes income from manuscripts. (E) business income, refers to: 1. the income obtained by individual industrial and commercial households engaged in production and business activities, and the income obtained by investors of sole proprietorship enterprises and individual partners of partnerships from the production and operation of sole proprietorship enterprises and partnerships registered in the territory of the PRC; 2. the income obtained by individuals from the running of schools, medical treatment, counseling, and other remunerated service activities in accordance with the law; and 3. the income obtained by individuals from contracting to enterprises and public institutions, Income derived from contracting, leasing, subcontracting and subletting of enterprises and institutions; 4. Income derived from other production and business activities. （Income from interest, dividends and bonuses refers to the income from interest, dividends and bonuses derived from the ownership of debentures and equity. (vii) Income from property leasing refers to the income obtained by an individual from the leasing of real estate, machinery and equipment, vehicles and vessels, as well as other property. (h) Income from transfer of property refers to the income derived from the transfer of securities, equity interests, shares of property in partnerships, real estate, machinery and equipment, vehicles and vessels, and other property. (ix) Incidental income refers to the income from winning prizes, jackpots, lotteries and other incidental income. Where it is difficult to define the taxable income items of the income obtained by an individual, the competent tax authorities under the State Council shall determine the same. Article 4 of the Measures for Administration of Individual Income Tax on Transfer of Equity Interests stipulates that an individual transferring an equity interest shall pay individual income tax on the basis of the income from the transfer of the equity interest, less the original value of the equity interest and the reasonable expenses, with the balance of the income from the transfer of the equity interest as the taxable income. Reasonable expenses refer to the taxes and fees paid in accordance with the regulations at the time of the transfer of equity.
Legal Objective:Shareholders of a limited liability company may transfer all or part of their shareholdings to each other under Article 71 of the Company Law. The transfer of equity by a shareholder to a person other than a shareholder shall be approved by a majority of the other shareholders. Shareholders shall notify the other shareholders in writing to seek their consent to the transfer of their shareholdings, and the other shareholders shall be deemed to have consented to the transfer if they fail to respond to the written notice after thirty days from the date of receipt of the written notice. If more than half of the other shareholders do not agree to the transfer, the disagreeing shareholders shall purchase the transferred equity; if they do not do so, they shall be deemed to have agreed to the transfer. The other shareholders shall have the right of first refusal to purchase the transferred shareholdings under the same conditions as the shareholders who have agreed to the transfer. If two or more shareholders claim to exercise the right of first refusal, they shall negotiate to determine their respective purchase ratios; if the negotiation fails, the right of first refusal shall be exercised in accordance with the ratio of their respective capital contributions at the time of the transfer. If the articles of association of the company on the transfer of equity otherwise provided, from its provisions.