Good news For Small and Hi-Tech Enterprises

Good news For Small and Hi-Tech Enterprises

Ministry of Finance and State Administration of Taxation jointly issue two new policies bring good news to small low profit enterprises and high technology enterprises.

These two new policies as “Circular on Further Expanding the Coverage of the Preferential Income Tax Policy for Small Low-profit Enterprises” and “Circular on Extending the Length of Years for High-tech Enterprises and Technology-oriented Small and Medium-sized Enterprises to Carry Forward Their Losses”.

It was mentioned that during the period from 1st January 2018 to 31st December 2020, the previous CNY500, 000 upper limit of the annual taxable income of a small low-profit enterprise is doubled to be CNY1 million, meaning that if the annual taxable income of a small low-profit enterprise is equal to or lower than CNY1 million, its income will be counted into the taxable income at the half-reduced rate, and the enterprise income tax is calculated and paid at the 20% tax rate.

It was further mentioned that from 1st January 2018, an enterprise becoming qualified as a high-tech enterprise or a technology-oriented small or medium-sized enterprise (SME) in the current year, may carry forward the losses incurred in preceding five years before it gains such qualification, to the extent of the portion that has not been offset yet, for up to ten years in the future.

These two new policies are to promote the development of SMEs and hi-tech enterprises and will be meaningful to the economy and research and development of China.

Details about the two policies please refer to the link below:

This policy please click Read More.

http://szs.mof.gov.cn/zhengwuxinxi/zhengcefabu/201807/t20180713_2960459.html

http://szs.mof.gov.cn/zhengwuxinxi/zhengcefabu/201807/t20180713_2960452.html

 

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