The Ministry of Finance and the State Taxation Administration released on March 3, 2022 the Announcement on Further Implementing the Policy of Reducing and Waiving the "Six Local Taxes and Two Fees" for Small-Micro Profit Enterprises (hereafter “SMEs”), which would be implemented during the period from January 1, 2022 to December 31, 2024.
It is clarified that people's governments of provinces, autonomous regions, and municipalities directly under the central government may, based on the actual situations of their localities, reduce the “Six local taxes and Two fees” within the tax range of 50% for VAT small-scale taxpayers, SMEs and self-employed households. The “Six local taxes and Two fees” include resources tax, urban maintenance and construction tax, property tax, urban land use tax, stamp tax (excluding stamp tax for securities trading), arable land occupation tax, as well as education surcharge, and local education surcharge. In addition, the tax cuts can be implemented together with other preferential policies.
For the purposes of this Announcement, SMEs refer to enterprises engaging in industries which are not restricted or prohibited by the State and satisfying three conditions, namely, the annual taxable income amount does not exceed CNY3 million, the staff headcount does not exceed 300 and the total amount of assets does not exceed CNY50 million.
The determination of a SME shall be based on the outcome of annual final settlement of corporate income tax. Where a newly-established enterprise registered as a general VAT payer engages in an industry which is not restricted or prohibited, and satisfies two criteria, namely, the staff headcount does not exceed 300 as at end of the preceding month for declaration period and the total assets do not exceed CNY50 million, it may, prior to its first completion of final settlement formalities, enjoy the incentives for SMEs stipulated in hereof.
The validity period of this Announcement is from 1 January 2022 to 31 December 2024.