Small Business Tax Savings Top Rmb37 billion in First Three Quarters

China has recently launched a series of tax incentives to boost the growth of small businesses. The annual taxable income threshold was increased from Rmb60,000 or below to Rmb100,000 or below. Under this policy standard, small low-profit enterprises having tax registration with the tax authorities totalled 8,561,000 in the first three quarters of this year, of which 2,433,400 made profits and 2,364,300 enjoyed preferential income tax. More than 90% of the relevant enterprises benefited from the enterprise income tax concessions, which topped Rmb7.462 billion.

According to the State Administration of Taxation (SAT), a total of 21 million small low-profit enterprises and individually-owned businesses nationwide benefited from the temporary exemption of VAT and business tax in the first three quarters of this year. Tax relief for VAT and business tax totalled Rmb29.647 billion.

Taken these three taxes together, total tax savings amounted to Rmb37.109 billion.

SAT said that it would enhance its service by offering automatic calculation of income tax relief of the small low-profit enterprises by means of information technology thus reducing the reporting burden on taxpayers. Reminder service will be provided for taxpayers failing to declare entitlement to the preferential policies in time. Also, enterprises failing to enjoy in time the preferential policies are entitled to be informed of the excess in tax they have paid in the next declaration.