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Preferential Policies for Small-Scale Enterprises!

What preferential policies small-scale enterprises can enjoy?

I. Value Added Tax (VAT) and Business Tax (BT) preferential policies:

1. From Aug 1, 2013, small-scale enterprises under below conditions can enjoy VAT and BT exemption:

  • Small-scale VAT taxpayer with monthly sales revenue less than RMB20,000 (inclusive, so as below), VAT is exempted;

  • BT taxpayer with monthly operation income less than RMB20,000, BT is exempted.

-- Prescribed by “Cai Shui (2013) No. 52”.

2. From Oct 1, 2014 to Dec 31, 2015, the tax preferential policy expanded as:

  • For small-scale VAT taxpayer with monthly sales revenue less than RMB30,000 (inclusive, so as below), VAT is exempted;

  • For BT taxpayer with monthly operation income less than RMB30,000, BT is exempted;

-- Prescribed by “ Cai Shui (2014) No. 71”

II. Enterprise Income Tax(EIT) preferential policies:

3. Small-scale enterprises with minimal profits that are qualified are subject to the applicable enterprise income tax rate with a reduction of 20%.

-- Prescribedby <<The Law of the PRC on Enterprise Income Tax >> Article 28.

4. NEW: From January 1, 2015 to December 31,2017, small-scale enterprises with an annual taxable income of no more than RMB200,000(inclusive) enjoy a deduction of 50% of its taxable income and are subject to the 20% of enterprise income tax rate.

-- Decided by the executive meeting of the State Council held on Feb 25, 2015.

III. Government fundspreferential policies:

5. From Jan 1, 2015 to Dec 31, 2017, for the small-scale enterprise with monthly revenue or of no more than RMB 30,000 (90,000 if file tax quarterly), following government funds is exempted.

  • Education surcharge;

  • Local education surcharge;

  • Water construction funds;

  • Cultural business construction fee

-- Prescribed by“Cai Shui (2014) No. 122”

6. If a small-scale enterprise is under below conditions at the same time, the disabilities security can be exempted:

  • Total employee is less than 20 persons;

  • Within 3 years since the enterprise is registered.

-- Prescribed by“Cai Shui (2014) No. 122”

Nowadays China government increasingly strengthens the support to small-scale enterprises, from government’s macro policy and the practices recently, there very likely will be more preferential policies implemented in future,I will post the latest information to members once related polices published.

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Yolanda He

M: +86 182 0189 2790

T: +86 21 3166 7780

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