China: New tax incentives for small and low-profit enterprises

To further promote the development of small and low-profit enterprises, the authorities recently issued the new incentives policy of preferential Corporate Income Tax (CIT) treatment for whom with annual taxable income under RMB300,000, now has been raised to RMB500,000

 

Small and low-profit enterprises with a taxable income not exceeding RMB 500,000 are all allowed to pay CIT at the rate of 20% on only 50% of their taxable income from the beginning of 2017 to the end of 2019.

 

Small and low-profit enterprises refer to enterprises engaged in industries which are not prohibited or restricted by the government and meet the following conditions:

For industrial enterprises, with annual taxable income not exceeding RMB 500,000, total employees not exceeding 100 person, and total assets not exceeding RMB 30 million

 

Other enterprises with annual taxable income not exceeding RMB 500,000, total employees not exceeding 80 person, and total assets not exceeding RMB 10 million.

 

Q1

What procedures need to be implemented to get the incentives policy?

The enterprise shall fill in the tax return.

 

Q2

What If the small and low-profit enterprises meet all criteria yet did not get the half tax policy in the first quarter of 2017?

Tax will be deducted In the future quarter when enterprises are paying CIT.

 

Right now, the small and low-profit enterprises with CIT of RMB 300-500k will be the largest benefit groups ever.

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