Categories: Finances

China issues preferential tax policy for small firms, household businesses By Reuters


© Reuters. FILE PHOTO: The sign of China’s Ministry of Finance is pictured in Beijing, China August 23, 2018. To match Exclusive USA-TRADE/CHINA-FINMIN REUTERS/Jason Lee

BEIJING (Reuters) – China’s finance ministry on Monday issued preferential tax policy for some small firms and household businesses, as part of steps to support the economic recovery.

China will levy a 20% income tax for small firms with annual sales not exceeding 1 million yuan ($145,340.39), effective from the start of 2023 to the end of 2024, the ministry said in a notice.

Small firms to enjoy the lower tax – versus the standard 25% rate – need to have annual taxable income not exceeding 3 million yuan, the number of employees not exceeding 300, and total assets not exceeding 50 million yuan, the ministry said.

It will also halve personal income tax for household businesses with annual sales not exceeding 1 million yuan.

The government has promised to improve its tax preferential policies this year, offering more tax cuts and refunds, to support the economy that is recovering steadily from one of worst showings in nearly half a century last year.

($1 = 6.8804 renminbi)

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