This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
  • Delicious


Close

Password Reminder

Please enter your email address to receive a password reminder.

 

Log into Tax-News+
Not registered yet? Find out about our daily news alert service »

Email Address: 
Password: 

Login »

Forgotten your password?


Today’s Top Headlines




China Relaxes Tax Break Compliance For Small Businesses

by Mary Swire, Tax-News.com, Hong Kong

23 April 2014

China's State Administration of Taxation (SAT) has released simplified procedures for those micro- and small-sized enterprises that wish to take advantage of the additional tax cuts agreed by the Ministry of Finance (MoF) on April 8, 2014.

Within a package of measures to underpin the country's economic growth rate, the MoF had then confirmed that micro- and small-sized enterprises, previously defined as those with an annual taxable income of less than RMB60,000 (USD9,635), would now include all those with incomes up to RMB100,000, with effect from January 1, 2014.

That significantly expands the firms eligible for the existing tax break, whereby the the calculation of their taxable income is reduced by 50 percent. Only companies whose taxable income exceeds this threshold are subject to tax at the normal 20 percent corporate tax rate. In addition, the tax break – originally scheduled to end on December 31, 2015 – has also been extended for a further year to the end of 2016.

To underpin the original motivation behind the tax break of helping small companies to manage with rising costs, SAT has now also announced, in order to reduce their compliance costs, that eligible businesses will be able to take advantage of the measure without obtaining SAT's prior approval.

In effect, an SAT statement disclosed that firms will only have to inform their local tax office of their financial situation, without the provision of complete accounting records at that time, and that final settlement will be made following year-end tax return filing. In addition, those eligible firms that had paid full income tax before April 8 will be able to obtain refunds of the overpaid tax.

China's measures to stimulate the growth of micro- and small-sized enterprises are seen to be important given that these entities were said, at the end of last year, to total 11.7m, and account for more than 75 percent of the total number of businesses in the country.

TAGS: compliance | Finance | tax | small business | business | tax compliance | corporation tax | China | tax rates | tax breaks | micro business | Tax

To see today's news, click here.

Leave a comment

Read our Posting Guidelines