Tax Cut Policies Unveiled in Battle Against Epidemic Outbreak
17 February 2020
China has announced a raft of tax breaks to support efforts in containing the coronavirus outbreak. The policies – which took effect on 1 January 2020 and will remain in force until further notice – cover a number of areas, including enterprise equipment purchase, medical staff overtime and tax deductions for charitable donations.
The tax breaks, announced on 7 February, cover the following:
- Tax policies in support of enterprises concerned (Announcement No. 8  of the Ministry of Finance and the State Taxation Administration)
Equipment purchased by manufacturers of key epidemic prevention and control materials to expand capacity are allowed a one-time pre-income tax deduction. These enterprises may also apply for a full refund of excess input value-added tax credits from their local tax authority on a monthly basis. Taxpayers are also exempt from value-added tax on income obtained from transporting key epidemic prevention and control materials.
- Tax policies regarding donations (Announcement No. 9  of the Ministry of Finance and the State Taxation Administration)
Donations in cash or in kind by enterprises and individuals for the fight against the novel coronavirus pneumonia epidemic through social welfare organisations or state organs, including government above the county level, are allowed full deduction in the calculation of taxable income. Donations of materials made by enterprises and individuals directly to hospitals are allowed full deductions in the calculation of taxable income.
- Policies regarding individual income tax (Announcement No. 10  of the Ministry of Finance and the State Taxation Administration)
Temporary work subsidies and bonuses received by medical staff and epidemic prevention and control workers in accordance with government-prescribed standards for participation in epidemic prevention and control are exempt from individual income tax. Goods in kind, such as medicine, medical supplies and protective supplies issued by work units to individuals are not included in wages and salaries and are exempt from individual income tax.
Source: State Taxation Administration
- Mainland China