Member ID:
Stay logged in for 30 days
Forget Your Password?

login CCFGroup App

Economy | Time: Jan 10 2019 9:16AM
More tax cuts for small firms
Text size
China will unveil larger-scale tax cuts and tax exemptions for small and micro businesses, a State Council executive meeting chaired by Premier Li Keqiang decided on Wednesday.

"Amid significant downward pressure, it is essential to introduce tax and fee cuts for small and micro firms, as this will be conducive to boosting employment and shoring up private businesses at the same time," Li said.

The meeting on Wednesday rolled out a host of inclusive tax breaks for small and micro businesses.

The eligibility of small and low-profit businesses to benefit from the preferential corporate tax will be significantly expanded, and deeper corporate tax cuts will be introduced. Small and low profit businesses with an annual taxable income of less than 1 million yuan ($146,500) and between 1 million to 3 million yuan will be eligible to have their tax calculated based on 25 percent or 50 percent of their taxable income.

This is expected to reduce their tax burden to about 5 to 10 percent. The adjusted tax incentives are expected to cover 95 percent of corporate tax payers, 98 percent of which will be private businesses.

At the same time, the VAT threshold on small-scale taxpayers will be raised from 30,000 yuan to 100,000 yuan of monthly sales.

Provincial-level governments will be given the authority to cut taxes up to 50 percent for small-scale VAT taxpayers under several local tax items, including resources tax, as well as education and local education surcharges.

The scope of tax incentives applied to investment in high-tech startups will be expanded to give more tax breaks to venture capital firms and angel investors investing in these businesses.

The above tax incentives will cover all taxes incurred since Jan 1, and will be effective for a tentative three years. At the same time, central government finance will provide stronger general transfer payment to local authorities to make up for possible funding gaps at local levels caused by large-scale tax and fee cuts.

"Since last year, the government has spent within its means and enacted several rounds of tax incentives for small and micro firms. The latest round of tax cuts will be the most substantial so far, and it is also appropriately structured," Li said, "The government must tighten its belt to give more benefits to businesses and energize the market."

Source: China Daily
Related Articles
China's industrial profits shrink in Jan-May
Proposed tariffs against China meet stiff opposition in week-long
Sino-US trade talks teams agree to further communications on
Fighting protectionism G20's top task amid trade war
China reports cargo throughput growth in Jan-May
China's pilot free trade zones attract 40,000 foreign enterprises:
Chinese yuan weakens to 6.8503 against USD Monday
China's online retail sales hit 3.86 tln yuan in Jan-May: report
Wider, deeper opening up on the agenda
Upgrading gives strong impetus to nation's manufacturing industry
Rayon yarn market change on vortex-spun yarn operation
Development of nylon downstream sectors
Polyester supply and demand change in 2019 and outlook ...
Polyester and end-user market demand in 2019
2019 polyester feedstock market outlook and short-term ...
Direct-spun PSF market pattern change