China Cuts Income Tax on Small Low-Profit Firms and Individually-Owned Businesses

According to an announcement (No. 12 [2021]) issued by the Ministry of Finance and the State Taxation Administration on 2 April, for small and low-profit businesses, enterprise income tax on the portion of annual taxable income not exceeding RMB1 million will be further reduced by half based on the preferential policy specified in Point 2 of an earlier circular (Cai Shui No. 13 [2019]). For individually-owned businesses, individual income tax on the portion of annual taxable income not exceeding RMB1 million will be halved based on the preferential policy already in force. These preferential policies are effective between 1 January 2021 and 31 December 2022.

Source: Ministry of Finance, State Taxation Administration ​​​​​​​