Small and Micro Enterprises now Eligible for Tax Breaks
A lot more Small and micro enterprises are eligible for tax breaks in China as the country strives to encourage innovation and boost employment even in the face of downward economic pressure. During and executive meeting of the State Council that was presided by Premier Li Keqiang has decided that businesses that has an annual taxable income below 300,000 yuan are eligible for a 50 percent reduction in their business income tax.
The said policy will be effective this year until the end of 2017, and all eligible companies will be paying a 20 percent tax rate and five percentage points lower than peer businesses. This will be the second time this year that the State Council and the Chinese Cabinet raised the income threshold for businesses to be able to qualify for the tax break. Last February the government raised the threshold for all small and micro companies from 100,000 to 200,000 yuan.
Furthermore the State Council decided to extend through 2017 the exemption of the value added tax and sales tax for all small and individually owned business with less than 30,000 yuan in monthly sales in which the exemption is set to expire by the end of the year. tax breaks for small and micro businesses in China reached 61 billion yuan last year and according to the State Administration of Taxation the top taxation authority at least 10 billion yuna of the business income was reduced and around 2.46 million businesses benefited. Having a healthy development of small businesses will contribute greatly to the vitally of the market and help the national economy to counter the downward pressure.