After deferring the payment of some taxes and fees in the first quarter and second quarter of 2022: Manufacturing small and medium-sized enterprises that meet the conditions specified in the announcement, after filing tax declarations in accordance with the law, medium-sized enterprises in the manufacturing industry may postpone the payment of 50% of the amount of taxes and fees specified in this announcement, and small and micro enterprises in the manufacturing industry may postpone the payment of all taxes and fees specified in this announcement for a period of 6 months. At the expiration of the suspension period, the taxpayer shall pay the corresponding monthly or quarterly taxes in accordance with the law. 

Medium-sized manufacturing enterprises refer to enterprises in the classification of national economic industries whose industries are manufacturing industries, and whose annual sales are more than 20 million RMB (including 20 million RMB) or less than 400 million RMB (excluding 400 million RMB). Manufacturing small and micro enterprises refer to enterprises in the classification of national economic industries whose industry category is manufacturing and whose annual sales are less than 20 million RMB (excluding 20 million RMB). 

Sales volume refers to the sales amount subject to VAT, including tax declaration sales, audit and supplement sales, and tax assessment adjustment sales. Where the VAT difference taxation policy applies, it shall be determined by the sales amount after the difference.

The annual sales of manufacturing SMEs are determined as follows: Enterprises established for one year as of December 31, 2021, are determined according to the sales volume of the period from January 2021 to December 2021. 

Companies established less than one year as of December 31, 2021 shall be determined by sales for the period ended December 31, 2021/ sales for the actual operating month × 12 months. 

Enterprises established on or after January 1, 2022 shall be determined according to the sales volume of the actual declaration period/ the actual operating month× the sales volume of the 12 months. 

Deferred taxes and fees include corporate income tax, individual income tax, domestic value-added tax, domestic consumption tax and the attached urban maintenance and construction tax, education fee surcharge, and local education surcharge for the period of January, February, March, April, May, June (monthly payment) or the first and second quarters of 2022 (paid quarterly), excluding the taxes paid when withholding and payment, collection and payment, and applying to the tax authorities for invoicing. 

For the above-mentioned taxes and fees that have been paid and deposited before the implementation of this announcement and the period of January 2022, enterprises can voluntarily choose to apply for tax refunds (fees) and enjoy the deferred payment policy.

Mike Chang

Partner