Introduction
In response to the resurgence of COVID-19 in China, and to support enterprises, encourage business startups and promote innovation, the PRC Ministry of Finance and the State Taxation Administration have issued a series of tax policies to revive the economy in an orderly and effective manner. The relevant tax circulars include the extension of preferential policies implemented in previous years as well as newly issued preferential policies in 2022. According to the contents specified in the relevant circulars and current as of July 10, 2022, we have categorized and summarized the key information in the table below for reader’s easy reference.
Corporate Income Tax (“CIT”)
Individual Income Tax (“IIT”)
Valued-Added Tax (“VAT’), Consumption Tax (“CT”) and Other Taxes
Tax Administration and Collection
Conclusion
Confronted with the reemergence of COVID - 19, China’s economic development is facing challenges brought about by a decline in demand, supply shocks and anticipated weakening. The preferential tax policies issued by the PRC Ministry of Finance, the State Taxation Administration, the PRC Ministry of Science and Technology and other ministries have vital significance to the stabilization of market anticipation, the boosting of market confidence and support the growth of enterprises. We will continue to pay close attention to the newly issued tax policies and update any new information.
1. According to Article 2 of Cai Shui [2019] No. 13, qualified small and low-profit enterprises with an annual taxable income of RMB 1 million or less are subject to an effective CIT rate of 5%. Where their annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the RMB 1 million portion will be subject to an effective CIT rate of 5%, whereas the excessive portion will be subject to the effective CIT rate of 10%.
In response to the resurgence of COVID-19 in China, and to support enterprises, encourage business startups and promote innovation, the PRC Ministry of Finance and the State Taxation Administration have issued a series of tax policies to revive the economy in an orderly and effective manner. The relevant tax circulars include the extension of preferential policies implemented in previous years as well as newly issued preferential policies in 2022. According to the contents specified in the relevant circulars and current as of July 10, 2022, we have categorized and summarized the key information in the table below for reader’s easy reference.
Corporate Income Tax (“CIT”)
Individual Income Tax (“IIT”)
Valued-Added Tax (“VAT’), Consumption Tax (“CT”) and Other Taxes
Tax Administration and Collection
Conclusion
Confronted with the reemergence of COVID - 19, China’s economic development is facing challenges brought about by a decline in demand, supply shocks and anticipated weakening. The preferential tax policies issued by the PRC Ministry of Finance, the State Taxation Administration, the PRC Ministry of Science and Technology and other ministries have vital significance to the stabilization of market anticipation, the boosting of market confidence and support the growth of enterprises. We will continue to pay close attention to the newly issued tax policies and update any new information.
1. According to Article 2 of Cai Shui [2019] No. 13, qualified small and low-profit enterprises with an annual taxable income of RMB 1 million or less are subject to an effective CIT rate of 5%. Where their annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million (inclusive), the RMB 1 million portion will be subject to an effective CIT rate of 5%, whereas the excessive portion will be subject to the effective CIT rate of 10%.