It is addressed during the State Council executive meeting on 19th April 2017 that China will take new tax cut measure to stimulate the corporate dynamism and competitiveness.
- Starting from July 1 2017, four VAT brackets will be streamlined into three, with tax rates of 17 percent, 11 percent and 6 percent targeting different products. 13 percent is to be cancelled.
- Tax cut incentives for small enterprises with limited profits will apply to a wider range from January 2017 to December 2019. Business with profits under 500,000 yuan, instead of the previous 300,000 yuan, will be made eligible for the tax preference.
- The proportion of pre-tax deduction for innovation-based tech firms will be further expanded from 50 present of R&D cost to 75 percent from 2017 to 2019.
- Tax incentives currently given to venture capital firms will expand to their investment in fledgling high-tech companies from this year in eight regions including Beijing, Tianjin and Shanghai, as well as in Suzhou Industrial Park.
- Further tax cuts for commercial health insurance will be applied nationwide, with an upper limit of 2,400 yuan to be deducted per person.
- It was also decided during the meeting to give a three-year extension for a package of tax cut policies, due to expire in 2016.
It is estimated that the tax burden on businesses will be further eased by around 380 billion yuan since the above new measures will fully taken effect.
If you have any questions, please send the email to me.
Ms. Jojo Hu
TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021