Tax policy for small and micro enterprises – March 2022
China is actively creating a friendly environment conducive to the growth of small businesses, taking measures to ease the financial burdens and solve financing difficulties for small and micro enterprises during the COVID-19 pandemic.
VAT
To further reduce tax burden for small and micro enterprises during current epidemic, from 1 April 2022 to 31 December 2022, small-scale VAT payers shall be exempted from VAT on taxable sales income subject to a 3% rate.
By this preferential tax policy published on March 24th 2022, actual VAT rate for those small-scale VAT payers will be reduced from current 1% to ZERO, which will further help to lower the tax costs.
The VAT exemption is only for the normal VAT invoice issued from April 1st 2022 till December 31st 2022. In other word, if any special VAT invoice issued during this period, the applicable VAT rate is still 3%.
Quote: No. 15 of 2022 Ministry of Finance General Administration of Taxation
文件援引：财政部 税务总局公告2022年第15号《财政部 税务总局关于对增值税小规模纳税人免征增值税的公告》
http://www.chinatax.gov.cn/chinatax/n359/c5173850/content.html
CIT
From January 1st 2022 to December 31st 2024, the corporate income tax (CIT) liability of small and low-profit enterprises has been halved for the portion of taxable profit exceeding 1 million RMB but not exceeding 3 million RMB.
Currently, all small and low-profit enterprises can enjoy a 20% CIT rate on 50% of the taxable profit amount for the portion of taxable profit exceeding 1 million RMB but not exceeding 3 million RMB, which is in result 10%.
Following the new regulation for 3 years, the NEW effective CIT rate for the portion of taxable profit RMB 1~3 million for small and low-profit enterprises, will be reduced from 10% to only 5%.
In summary, during YR2022, the current CIT levels for small and low-profit enterprises is:
Quote: Announcement No.13, 2022 of the State Administration of Taxation of the Ministry of Finance
文件援引：财政部 税务总局公告2022年第13号《财政部 税务总局关于进一步实施小微企业所得税优惠政策的公告》
http://www.chinatax.gov.cn/chinatax/n362/c5173677/content.html
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