Earlier on March 5, Premier Li Keqiang announced that a new package of tax-and-fee policies supporting enterprises would be implemented in 2022.
The new package of tax-and-fee policies contains both tax reductions and refunds. It shows support for the real economy, continuing to focus on micro and small market entities and the manufacturing industry, which aims at enhancing the development potential of enterprises.
More specifically, the estimated 2.5 trillion CNY for tax-and-fee can be divided into two parts.
One is the new tax-and-fee cuts, with a scale of about 1 trillion yuan, close to 2021. Specific measures can be seen as:
👉A temporary exemption on VAT payments will be granted to small taxpayers.
👉Corporate income tax on annual taxable income of between 1,000,000 yuan and 3,000,000 yuan will be halved once again for micro and small enterprises. (The tax rate will be further reduced to 5%.)
👉The coverage of additional tax deductions for R&D costs has been raised from 75% to 100% for small and medium sci-tech enterprises.
Therefore, by the end of June this year, the outstanding VAT credits will be refunded to them in one lump while the newly added credits will be settled monthly. The tax credits of some key industries such as manufacturing and R&D services will be fully settled within the year.
In addition, the policy also focuses on supporting the manufacturing industry, and comprehensively solves the problem of tax refunds in industries such as scientific research and technical services, eco-environmental protection, electricity and gas, and transportation, etc.
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