China Dropping Tax on Agriculture Sector

December 6, 2014 Taxation in China

BEIJING – The government is looking to secure the country’s food supply by dropping the taxes on the interest incomes on loans and insurance policies provided to farmers.

Earlier last week the Premier of China Li Keqiang announced that the national government will implement a number of tax breaks aimed at helping boost the growth and productivity of the national agriculture sector.

According to the Premier, banks and financial institutions providing small-scale loans of between CNY 50 000 and CNY 100 000 to farmers will not pay any business tax on the interest earned, and will also enjoy a 10 percent reduction in corporate income tax on the interest incomes.

The revenues garnered by insurance providers providing policies for crop and husbandry will also be granted a 10 percent discount on the corporate income tax.

The tax breaks are intended to encourage financial institutions to provide services to small clients who would often be overlooked, a move which the Premier described as “is critical to food security, increasing farmers’ incomes and modernizing the sector”.

Photo By: DaiLuo