China’s small profit enterprises or commonly referred to as small and micro enterprises (SMEs) make up most of the businesses in the Chinese market. They are considered as the main drivers of the country’s economy with a growth rate of at least 10 percent year-over-year. According to the Statista report, SMEs grew by over 38 million in 2019 whereas Beijing alone has over 3,100 industrial enterprises.
Read our previous article on Technology Enterprise Registration for SMEs in China
The growth of SMEs in China is unstoppable. Therefore, the Chinese government pushes to prioritize tax relief measures and ensure their expansion amid domestic or global challenges. Keep reading.
Deferred payment of corporate income tax
On May 19, 2020, China’s tax administrators announced the policy regarding the postponement of paying for corporate income taxes among low-profit enterprises. Moreover, the said period of deferment from May 1 to December 31, 2020, also applies to self-employed individuals who must pay for individual business income tax.
According to the new policy, the payment of income taxes will apply in the next tax declaration period of 2021. Hence, small and low-profit companies may postpone the payment after the annual IIT return period in 2020.
Meanwhile, enterprises that have already paid for the deferred tax can apply for a refund and pay altogether in 2021.
You may access the English translation of the notice here.
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