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Announcement of the Ministry of Finance and the State Taxation Administration on Relevant Tax and Fee Policies With Respect to Further Supporting the Development of Small and Micro Enterprises and Individual Businesses
Announcement of the Ministry of Finance and the State Taxation Administration on Relevant Tax and Fee Policies With Respect to Further Supporting the Development of Small and Micro Enterprises and Individual Businesses
Ministry of Finance State Taxation Administration Announcement No. 12 of 2023
Ministry of Finance State Taxation Administration Announcement No. 12 of 2023
In order to further support the development of small and micro enterprises and individual businesses, relevant tax and fee policies are hereby announced as follows:
1. From January 1, 2023 to December 31, 2027, individual income tax on an individual business’s annual taxable income that does not exceed two million yuan shall be reduced by half. On the basis of enjoying the current individual income tax preferences, individual businesses can enjoy the preference stipulated in this article simultaneously.
2. From January 1, 2023 to December 31, 2027, for small-scale VAT taxpayers, small and low-profit enterprises and individual businesses, resource tax (excluding water resource tax), urban maintenance and construction tax, real estate tax, urban and township land use tax, stamp tax (excluding stamp tax on securities transaction), cultivated land occupation tax and educational surcharges and local educational surcharges shall be reduced by half.
3. The policy of small and low-profit enterprises calculating the taxable income at 25 percent and paying enterprise income tax at a rate of 20 percent shall be extended to December 31, 2027.
4. Small-scale VAT taxpayers, small and low-profit enterprises, and individual businesses that have already enjoyed other preferences regarding resource tax, urban maintenance and construction tax, real estate tax, urban and township land use tax, stamp tax, cultivated land occupation tax, educational surcharges and local educational surcharges can also enjoy the preferences stipulated in Article 2 of this Announcement.
5. The term “small and low-profit enterprises” mentioned in this Announcement refers to enterprises engaged in industries not restricted or prohibited by the state, and at the same time meet the following three conditions: (1) the annual taxable income does not exceed three million yuan; (2) the number of employees does not exceed 300 people; (3) the total asset amount does not exceed 50 million yuan.
The number of employees includes the number of employees who have established a labor relationship with the enterprise and the number of dispatched workers accepted by the enterprise. The indicators of the number of employees and the total asset amount should be determined according to the average value of the enterprise’s quarterly figures throughout a year. The specific calculation formula is as follows:
Quarterly average value = (Quarter start value + Quarter end value) ÷ 2
Annual average value = Total of all quarterly average values ÷ 4
For enterprises that start or terminate business activities in the middle of a year, the actual operating period shall be considered as a tax year to determine the above-mentioned indicators.
The determination of small and low-profit enterprises is based on the results of the annual reconciliation of enterprise income tax. Newly established enterprises registered as general VAT taxpayers that are engaged in industries not restricted or prohibited by the state and that at the same time meet the two conditions of the number of employees at the end of the month of a filing period not exceeding 300 people and the total asset amount not exceeding 50 million yuan, can enjoy the preferences stipulated in Article 2 before the reconciliation.
6. Taxes that have been collected before the date of the issuance of this Announcement can be offset against taxes that taxpayers shall pay in the following months or can be refunded. Taxpayers that have already completed the deregistration before the date of the issuance of this Announcement shall not enjoy the preferences stipulated in this Announcement retroactively.
The individual income tax preferences for individual businesses stipulated in Announcement of the Ministry of Finance and the State Taxation Administration on Further Implementing the “Six Types of Taxes and Two Types of Fees” Reduction Policy for Small and Low-Profit Enterprises (Ministry of Finance State Taxation Administration Announcement No. 10 of 2022) and Announcement of the Ministry of Finance and State Taxation Administration on Income Tax Preferences for Small and Micro Enterprises and Individual Businesses (Ministry of Finance State Taxation Administration Announcement No. 6 of 2023) has ceased to be effective from January 1, 2023.
1. From January 1, 2023 to December 31, 2027, individual income tax on an individual business’s annual taxable income that does not exceed two million yuan shall be reduced by half. On the basis of enjoying the current individual income tax preferences, individual businesses can enjoy the preference stipulated in this article simultaneously.
2. From January 1, 2023 to December 31, 2027, for small-scale VAT taxpayers, small and low-profit enterprises and individual businesses, resource tax (excluding water resource tax), urban maintenance and construction tax, real estate tax, urban and township land use tax, stamp tax (excluding stamp tax on securities transaction), cultivated land occupation tax and educational surcharges and local educational surcharges shall be reduced by half.
3. The policy of small and low-profit enterprises calculating the taxable income at 25 percent and paying enterprise income tax at a rate of 20 percent shall be extended to December 31, 2027.
4. Small-scale VAT taxpayers, small and low-profit enterprises, and individual businesses that have already enjoyed other preferences regarding resource tax, urban maintenance and construction tax, real estate tax, urban and township land use tax, stamp tax, cultivated land occupation tax, educational surcharges and local educational surcharges can also enjoy the preferences stipulated in Article 2 of this Announcement.
5. The term “small and low-profit enterprises” mentioned in this Announcement refers to enterprises engaged in industries not restricted or prohibited by the state, and at the same time meet the following three conditions: (1) the annual taxable income does not exceed three million yuan; (2) the number of employees does not exceed 300 people; (3) the total asset amount does not exceed 50 million yuan.
The number of employees includes the number of employees who have established a labor relationship with the enterprise and the number of dispatched workers accepted by the enterprise. The indicators of the number of employees and the total asset amount should be determined according to the average value of the enterprise’s quarterly figures throughout a year. The specific calculation formula is as follows:
Quarterly average value = (Quarter start value + Quarter end value) ÷ 2
Annual average value = Total of all quarterly average values ÷ 4
For enterprises that start or terminate business activities in the middle of a year, the actual operating period shall be considered as a tax year to determine the above-mentioned indicators.
The determination of small and low-profit enterprises is based on the results of the annual reconciliation of enterprise income tax. Newly established enterprises registered as general VAT taxpayers that are engaged in industries not restricted or prohibited by the state and that at the same time meet the two conditions of the number of employees at the end of the month of a filing period not exceeding 300 people and the total asset amount not exceeding 50 million yuan, can enjoy the preferences stipulated in Article 2 before the reconciliation.
6. Taxes that have been collected before the date of the issuance of this Announcement can be offset against taxes that taxpayers shall pay in the following months or can be refunded. Taxpayers that have already completed the deregistration before the date of the issuance of this Announcement shall not enjoy the preferences stipulated in this Announcement retroactively.
The individual income tax preferences for individual businesses stipulated in Announcement of the Ministry of Finance and the State Taxation Administration on Further Implementing the “Six Types of Taxes and Two Types of Fees” Reduction Policy for Small and Low-Profit Enterprises (Ministry of Finance State Taxation Administration Announcement No. 10 of 2022) and Announcement of the Ministry of Finance and State Taxation Administration on Income Tax Preferences for Small and Micro Enterprises and Individual Businesses (Ministry of Finance State Taxation Administration Announcement No. 6 of 2023) has ceased to be effective from January 1, 2023.
Ministry of Finance State Taxation Administration
August 2, 2023
August 2, 2023
All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.