The Ministry of Finance and the State Taxation Administration jointly released on August 1, 2023 the Announcement on the Policy of Reducing and Exempting the VAT for Small-scale VAT Taxpayers (No.19 (2023) Document), which details on the extension of the preferential tax policy.
Specifically, small-scale VAT taxpayers with monthly sales of less than 100,000 yuan (inclusive) would be exempted from the VAT, their taxable sales income would be taxed at a reduced rate of 1% instead of 3%, and the prepaying VAT items applicable to a 3% rate would be taxed at a reduced rate of 1%.