Under the principle of “no sharp turn” in China’s fiscal and taxation policies this year, the Ministry of Finance and the State Administration of Taxation announced on March 23 that in order to support epidemic prevention and control and help enterprises to relieve development, China will extend the implementation period of some preferential tax policies, many of which have been extended to the end of this year.
Among the extended policies, the implementation period of the preferential tax policies stipulated in the announcement of the Ministry of Finance and the State Administration of Taxation on supporting individual industrial and commercial households to return to work and work will be extended to December 31, 2021. Among them, from April 1 to December 31, 2021, small-scale value-added tax payers in Hubei Province apply 3% of the taxable sales income, and the value-added tax is levied at a reduced rate of 1%; the value-added tax items that apply 3% of the prepaid value-added tax items, and the value-added tax is prepaid at a reduced rate of 1%.
In addition, the individual income tax preferential policies related to epidemic prevention and control will continue until the end of the year. Novel coronavirus pneumonia is a policy that requires temporary medical benefits and bonus from medical workers and epidemic prevention workers who are participating in the epidemic prevention work to be exempted from personal income tax. The units are issued to individuals to prevent drugs, medical supplies and protective articles, such as new crown pneumonia, excluding cash and wages, and to exempt from personal income tax.
During the epidemic period, the film and other industries were seriously affected. In order to support the development of related industries, China will exempt taxpayers from value-added tax on the income from film screening services, which will continue until the end of this year.
“Although China’s current control of the epidemic continues to improve and the economic operation situation continues to improve, there is still an imbalance between industries and fields, especially the consumption and services of some contacting and gathering industries have not yet recovered to the pre epidemic level.” In an interview with Beijing business daily, Sun Ying, a researcher at the minyin think tank, said that the financial policy focused on the relief of market players, extended the implementation period of some phased policies such as value-added tax preference for small-scale taxpayers, and did not make a sharp turn, so as to make the economic fundamentals more stable.
In addition to the continued support for tax preferential policies related to epidemic prevention and control, the Ministry of Finance and the State Administration of taxation have also extended the implementation period of 25 tax preferential policies that have expired or will expire in supporting the development of small and micro enterprises, scientific and technological innovation and related social undertakings.
Supporting science and technology innovation enterprises and financing of small and micro enterprises has become the focus of these policies. In 2018, the Ministry of Finance and others issued a document to raise the deduction proportion of enterprise R & D expenses to 75%. This policy will expire at the end of 2020, and the policy will be extended for three years. In addition, from January 1, 2018 to December 31, 2020, the loan contracts signed by financial institutions with small enterprises and micro enterprises will be exempted from stamp duty, and the policy will also be extended for three years. As for the collected taxes, the Ministry of finance has indicated that the taxes and fees payable by taxpayers or payers in the future can be offset or refunded.
Beijing Business News (reporter Tao Feng, LV Yinling)
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