In order to support the development of manufacturing small, medium and micro enterprises and promote the stable operation of the industrial economy, the State Taxation Administration and the Ministry of Finance of the State Council issued together a notice on October 29th, 2021, deferring the payment of some taxes and fees for manufacturing small, medium and micro enterprises (including sole proprietorship, partnership, individual business households, the same below) for the fourth quarter of 2021 from November 1st, 2021. Details as follows:
Small, medium and micro enterprises in the manufacturing industry, refers to the enterprises classified as manufacturing industries in the National Economic Classification, and with annual sales of RMB 20 million Yuan or more (including RMB 20 million Yuan) below RMB 400 million Yuan (excluding RMB 400 million Yuan) (hereinafter referred to as medium-sized manufacturing enterprises) and annual sales of RMB 20 million Yuan or less (excluding RMB 20 million Yuan) (hereinafter referred to as small-and-micro-sized manufacturing enterprises).
Sales refer to VAT taxable sales, including tax declaration sales, audit check sales and tax assessment adjustment sales. If the VAT differential taxation policy is applied, the sales after the differential shall be taken to determine. The determinations of annual sales include: 1) for enterprises that have been established for one year as of September 30th, 2021, sales for the period from October 2020 to September 2021 shall be determined; 2) for enterprises established for less than one year as of September 30th, 2021, sales for the period covered as of September 30th, 2021 divide the actual months of operation multiply the sales for 12 months shall be determined; 3) for enterprises established on or after October 1st, 2021, sales in accordance with the first reporting period divide the actual months of operation multiply the sales for 12 months shall be determined.
The tax deferral includes enterprise income tax, personal income tax (except for withholding payment), domestic value-added tax, domestic consumption tax and attached urban maintenance and construction tax, education surcharge and local education surcharge for the period of October, November and December of 2021 (monthly payment) or the fourth quarter of 2021 (quarterly payment), excluding the tax paid when applying for invoices from tax authorities. After filing tax returns, medium-sized manufacturing enterprises may defer 50% of the above taxes and fees, and small-and-micro-sized manufacturing enterprises may defer paying all the above taxes and fees. The deferral period is 3 months. When the deferral period expires, the taxpayer shall pay the deferred taxes and fees according to law.
Small, medium and micro enterprises in the manufacturing industry under the terms of this notice, in compliance with the Tax Collection Administration Law and its rules for the implementation may still apply for deferred tax payment.
If you want to read the complete article, you can refer to the below link (in Chinese only): http://www.shanghaiinvest.com/cn/viewfile.php?id=16861
If you have any question, please contact me.
Mr. Mike Chang (Partner)