China Extends Small-Business Tax Breaks

August 20, 2015 Taxation in China

BEIJING – In an effort to boost the national economy China is extending tax breaks for micro businesses for another two years.

On August 19th the Cabinet of China announced that current tax measures aimed at assisting small businesses will be extended, and, in addition, some further tax breaks will be introduced.

The Cabinet has previously announced that annual taxable incomes less than RMB 200 000 will see their tax rate halved, however, with the recent announcement the threshold has been raised to RMB 300 000.

The raised threshold will take effect on October this year, and last until the end of 2017.

In addition the currently available exemption from paying income tax available for businesses earning between RMB 20 000 and RMB 30 000 per month will be extended until the end of 2017, although originally the break was slated to end this year.

It was noted by the Cabinet that small and micro businesses are a key aspect of the national economy, and that the tax breaks will “…provide further tax support to small and micro businesses and allow the government’s proactive fiscal policy to have a greater impact.”

Photo By: McKay Savage