The China Ministry of Finance (MOF) and the State Taxation Administration (STA) have recently released several announcements aimed at supporting the development of micro and small enterprises and individual businesses. These announcements provide clarity on the extension and optimization of multiple preferential tax policies.
One of the most significant policies is the extension of the value-added tax (VAT) reduction and exemption policy for small-scale taxpayers until December 31, 2027. This policy aims to support the growth of micro and small enterprises and individual businesses. In addition, small-scale VAT taxpayers, small and low-profit enterprises, and individual businesses will benefit from a 50% reduction in various taxes, including resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, farmland occupation tax, educational surcharges, and local education surcharges.
Furthermore, small and low-profit enterprises will have their taxable income calculated at a reduced rate of 25%, and the enterprise income tax (EIT) will be levied at a tax rate of 20%, with this policy also being extended until December 31, 2027. These policies are expected to provide much-needed support to small businesses in China, helping them to grow and thrive.
