China’s Individual Income Tax Law does not contain an anti-avoidance provision, unlike the Enterprise Income Tax Law, which makes the taxation of an indirect transfer of shares in a Chinese company legally groundless and it also creates a difference in the tax treatment of non-resident individuals and enterprises. From the perspective of a good tax policy, it is necessary to regulate the taxation of income from a cross-border indirect sale of shares by a non-resident individual. This article makes suggestions in this regard, including the clarification of the source of income derived from share alienations and the adoption of anti-avoidance rules in the Chinese individual income tax laws and regulations, as well as the development of a comprehensive anti-avoidance law to resolve the conflict between the legislation and the tax authority’s practice.