What changes will China’s tax and fee reduction policies make during the “14th five year plan” period? On April 7, at a press conference held by the State Council Information Office, assistant finance minister Ou Wenhan said that in accordance with the requirements of improving the quality, efficiency and sustainability of positive fiscal policies, China will comprehensively consider the needs of fiscal sustainability and the implementation of the policy of helping enterprises to bail out, balance the relationship between “current and long-term” and “needs and possibilities”, strive to improve the policy of tax reduction and fee reduction, and optimize the implementation mechanism . It is mentioned that the phased tax and fee reduction policies in response to the epidemic situation issued last year will be adjusted and withdrawn in an orderly manner. In the future, tax and fee reduction will focus on small and micro enterprises and technological innovation investment in manufacturing industry.
It is understood that during the 13th Five Year Plan period, China’s cumulative tax reduction and fee reduction exceeded 7.6 trillion yuan, including 4.7 trillion yuan tax reduction and 2.9 trillion yuan fee reduction. In the face of a sudden epidemic in 2020, China has introduced a temporary and urgent tax and fee reduction policy to effectively hedge the impact of the epidemic and help enterprises to develop.
Recently, China has extended the implementation period of some of the preferential tax policies. For example, 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 resume value-added tax policy will be extended to December 31, 2021. Also postponed to the end of this year are the personal income tax preferential policies related to epidemic prevention and control, and the exemption of value-added tax on the income from film screening services.
At the press conference, Ou Wenhan said that the phased tax and fee reduction policies in response to the epidemic situation issued last year will be adjusted by categories and withdrawn in an orderly manner. We should appropriately extend the implementation period of VAT reduction and other policies for small-scale taxpayers, and maintain the necessary support for economic recovery. The implementation of temporary and emergency policies related to epidemic prevention and control shall be stopped after the expiration.
In an interview with Beijing business daily, Hu Qimu, chief researcher of Sinosteel Economic Research Institute, said that the advance and retreat of fiscal policy reflects the guidance of precise policy implementation, just as monetary policy does not engage in flooding, and fiscal policy does not engage in rain and dew, so we should use the limited financial resources to solve the urgent problems of national economic development and build the medium and long-term development momentum.
Although the periodic tax and fee reduction policies to deal with the epidemic will be stopped after the expiration, the work of tax and fee reduction in China will continue to make efforts during the “14th five year plan” period. First of all, we should continue to implement the institutional tax reduction policies, such as reducing the value-added tax rate, the value-added tax rebate, the special additional deduction of personal income tax and so on.
“During the 13th Five Year Plan period, China issued a policy to allow some advanced manufacturing industries to refund the full amount of the incremental tax allowance on a monthly basis. This year’s policy is to remove the word “part”, that is, advanced manufacturing industries can be returned in full monthly, expanding the scope of applicable industries. ” Wang Jianfan, director of the tax department of the Ministry of finance, explained.
In terms of small and micro enterprises, while implementing the inclusive tax reduction and fee reduction policy, China will further increase the tax reduction and exemption of small and micro enterprises and individual businesses, increase the starting point of small-scale taxpayers’ value-added tax from 100000 yuan to 150000 yuan per month, and increase the proportion of small and micro enterprises and individual businesses whose annual taxable income is less than 1 million yuan on the basis of the current preferential policies On the other hand, the income tax will be reduced by half.
It is worth noting that the support of manufacturing industry and scientific and technological innovation will be strengthened. We will continue to implement the policy of 75% deduction for R & D expenses of enterprises, increase the proportion of deduction for manufacturing enterprises to 100%, encourage enterprises to increase R & D investment, and fully refund the incremental VAT allowance for advanced manufacturing enterprises on a monthly basis.
On April 7, the Ministry of Finance and the State Administration of Taxation issued the notice on further improving the policy of pre tax deduction of R & D expenses, which showed that if the R & D expenses actually incurred by manufacturing enterprises in R & D activities did not form intangible assets and were included in the current profits and losses, they would be deducted according to the regulations and 100% of the actual amount would be added before tax from January 1, 2021 If intangible assets are formed, they shall be amortised before tax according to 200% of the cost of intangible assets from January 1, 2021.
“Since January 1 this year, the proportion of R & D expenses of manufacturing enterprises has increased from 75% to 100%, which is the biggest structural tax cut in our country this year.” Wang Jianfan said.
At the same time, in order to enhance the technological innovation ability of enterprises, China will implement the “post subsidy” support mode in the national science and technology plan, guide enterprises to increase the strength of scientific and technological innovation, expand the scale of the national science and technology achievements transformation guidance fund, and promote the transformation, capitalization and industrialization of scientific and technological achievements in enterprises. In addition, we will implement and improve tax policies to support scientific and technological innovation, and give preferential tax to enterprises investing in basic research.
“During the period of the 14th five year plan, we should take innovation as the driving force of growth and achieve high-quality economic development. But in order to really achieve this, we have to solve many constraints and make up for the shortcomings. One of the most important is to speed up the tackling of the “neck sticking” problem. The external environment objectively requires us to achieve industrial upgrading through independent innovation. Therefore, it is particularly important and urgent to speed up the cultivation of independent innovation ability of micro market players. ” Hu Qimu said.
Beijing Business News (reporter Tao Feng, LV Yinling)
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