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Notice of Ministry of Finance and State Administration of Taxation on Relevant Tax Policies in Support of Fundraising for Small and Micro-sized Enterprises

Document No.: Cai Shui [2017] No.77

Taxes:Stamp Tax,Value-added Tax

Date of Promulgation:

IssueDepartment:Ministry of Finance,State Administration of Taxation

Date of Implementatio:2017-10-26

Annex:

Finance offices (bureaus), state taxation bureaus, local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state budgetary plan, and the Financial Bureau of Xinjiang Production and Construction Corps.:

 

In order to further increase the support for small and micro-sized enterprises, promote the alleviation of financing difficulties and high financing cost, the relevant tax policy is hereby notified as follows:

 

I. From December 1, 2017 to December 31, 2019, the interest income obtained by financial institutions from small-amount loans they have granted to farmer households, small businesses, micro enterprises, and individually-owned businesses shall be exempted from VAT. These financial institutions are required to have relevant tax-exemption certifications and documentation saved for future examination, calculate separately the interest income derived from small-amount loans that meet tax-exemption requirements, and file the tax return with the  in-charge taxation authorities according to existing rules; where they fail to calculate such interest income separately, they shall not be exempted from VAT. Article I of the“Notice of the Ministry of Finance and the State Administration of Taxation on Continuing Relevant Tax Policies for Supporting Rural Finance Development” (Cai Shui [2017] No.44) shall be abolished accordingly.

 

II. From January 1, 2018 to December 31, 2020, loan contracts entered into between financial institutions and small businesses or micro enterprises are not subject to the stamp tax.

 

III. The termfarmer households as mentioned in this notice refers to households living in the administrative areas of townships (not including Chengguan towns) for a long time (more than one year), as well as the households living in the administrative villages under the jurisdiction of Chengguan towns for a long time, and households who do not reside in the locality but reside in the country for more than one year, and employees of state-owned farms. Collective households of state-owned economy organs, groups, schools, enterprises and institutions located within the administrative areas of towns (not including Chengguan towns) and within the administrative villages under the jurisdiction of Chengguan towns; households who have a local Hukou but live out for more than one year, whether or not the contracted cultivated lands are retained, they do not belong to the farmer households. Farmer households take household as a statistical unit, which can be engaged in not only agricultural production and management, but also non-agricultural production and management. The decision of a farmer household's loan shall be based on whether the borrower belongs to the farmer household at the time of loan issuance.

 

The termsmall businesses, micro enterprises as mentioned in this notice refers to the small businesses and micro enterprises conforming to the“Provisions for Classification Standards of Small and Medium-sized Enterprises” (Gong Xin Bu Lian Qi Ye [2011] No.300). The total assets and employees' indicators are all determined by the actual status of the loan at the time of issuance; the operating income target is determined by the cumulative total of 12 natural months before the loan is issued, and if the period is less than 12 natural months, the following formula shall be used for calculation.

 

Operating income (annual) = Business income during the actual existence of the enterprise / actual months of existence of the enterprise x12

 

The term“microfinance” as mentioned in this notice refers to the loans to farmer households, small businesses and micro businesses or individual industrial and commercial households with the single credit granting of less than RMB 1 million Yuan (inclusive); the termno credit granting refers to the loans with the amount of single loan contract and the loan balance of less than RMB 1 million Yuan (inclusive).

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