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Circular on On-going Implementation of Taxation Policies Supporting and Promoting Entrepreneurship and Employment for Targeted Groups

Document No.:CaiShui [2017] No. 49

Taxes:Value-added Tax,Educational Surcharge,Individual Income Tax,Tax Incentives,City Maintenance and Construction Tax

Date of Promulgation:

IssueDepartment:Ministry of Finance,State Administration of Taxation

Date of Implementatio:2017-06-12


Financial Departments (Bureaus), State Taxation Bureaus, Local Taxation Bureaus and Human Resources and Social Security Departments (Bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government and cities specially designated in the state budgetary plan and Financial Bureau and Human Resource and Social Security Bureau of Xinjiang Construction and Production Corps,

To support and promote entrepreneurship and employment of focus groups, relevant tax policies are hereby notified as follows:

Article I Where people, who have the Certificates of Entrepreneurship and Employment (indicating “tax policies for independent entrepreneurship” or “tax policies for independent entrepreneurship in the graduation year”) or the Registration Certificates of Unemployment (indicating “tax policies for independent entrepreneurship” or with the Certificates for University Graduates’ Independent Entrepreneurship), undertake individual businesses, their actual VAT, urban maintenance and construction tax, educational surcharge, local educational surcharge and individual income tax payable shall be in proper order deducted within three years according to the limit amount of 8,000 yuan for each household per year.The limit amount can be floated upward by 20% at most. People’s governments of all provinces, autonomous regions, municipalities directly under the Central Government can determine their own specific limit standards within the range according to their local conditions and submit them to the Ministry of Finance and the State Administration of Taxation for the record.

Where taxpayers’ annual taxes payable are lower than the deduction limit, the actual taxes payable shall serve as the limit; where they are higher than the deduction limit, the aforementioned deduction limit shall prevail.

The aforementioned people refer to: 1.those who have registered at public employment service institutions of human resources and social security departments for their unemployment of more than half a year; 2. the registered unemployed people within the labor-age range from zero employment families and from the families enjoying the minimum living standard guarantee for urban residents; 3. university graduates within the graduation year.  University graduates refer to the fresh graduates from the common colleges and universities and higher educational institutions for adults which offer higher curricular education; The graduation year refers to the calendar year when students graduate, that is from January 1st to December 31st.

Article II Where trading enterprises, service-oriented enterprises, processing enterprises among labor and employment service enterprises and small-scale business entities with processing properties in neighborhood and communities, in their newly-added positions, newly recruited people, who have registered at public employment service institutions of human resources and social security departments for their unemployment of more than half a year and who have the Certificates of Entrepreneurship and Employment or the Registration Certificates of Unemployment (indicating “tax policies for enterprises’ recruitment”) , and sign labor contracts with a term of more than one year with them and pay social insurance contributions for them according to the law, they can, within three years, enjoy the preference of deducting their VAT, urban maintenance and construction tax, educational surcharge, local educationalsurcharge and enterprise income tax in proper order according to the number of people they actually recruit within the limit amount. The limit amount standard is 4,000 yuan per year per person, which can be floated upward by 30% at most. People’s governments of all provinces, autonomous regions, municipalities directly under the Central Government can determine their own specific limit standards within the range according to their local conditions and submit them to the Ministry of Finance and the State Administration of Taxation for the record.

The tax deduction amount calculated according to the aforementioned standard shall be deducted from enterprises’ actual VAT, urban maintenance and construction tax, educational surcharge, local educational surcharge and enterprise income tax payable in the current year. Those, which cannot be fully deducted in the current year, shall not be carried forward to the next year to be deducted.

The service-oriented enterprises mentioned in the article refer to the enterprises, which undertake business activities within the scope of the “real estate leasing services”, “business auxiliary services” (exclusive of cargo transport agent and customs clearance services), “life services” (exclusive of cultural and sports services) in the Explanatory Notes for Sales of Services, Intangible Assets and Real Estate (Circular of the Ministry of Finance and the State Administration of Taxation on Comprehensively Carrying out the Pilot Project of BT-for-VAT——AttachmentofCaiShui [2016] No. 36), and private non-enterprise units registered and established according to the Interim Regulations for Registration and Management of Private Non-enterprise Units (Decree No. 251 of the State Council).

Article III The people enjoying the aforementioned preferential policies shall apply for the Certificate of Entrepreneurship and Employment according to the following rules:

(I) According to Article 63 of the Regulations for Employment Services and Employment Management (Decree No. 24 of the Ministry of Human Resources and Social Security), the unemployed urban permanent residents within the labor-age range, who require for jobs, can register at public employment service institutions and apply for the Certificate of Entrepreneurship and Employment. For registered unemployed people from zero employment families and from urban minimal assurance households, public employment service institutions shall indicate the situation in the Certificate of Entrepreneurship and Employment.

(II) University graduates in school can apply to public employment service institutions for the Certificate of Entrepreneurship and Employment by presenting their student cards or commission the employment guidance centers of their universities to apply to public employment service institutions for the Certificate of Entrepreneurship and Employment on behalf of them; After leaving school, university graduates within the graduation year can directly apply to public employment service institutions for the Certificate of Entrepreneurship and Employment.

(III)After the aforementioned people apply for relevant certificates, human resources and social security departments in the entrepreneur and employment places shall check and verify whether they belong to the scope or not, whether they are employed or not and the fact that they have already enjoyed the policies and indicate “tax policies for independent entrepreneurship”, “tax policies for independent entrepreneurship in the graduation year” or “tax policies for enterprises’ recruitment” in the Certificate of Entrepreneurship and Employment; For those concurrently conform to the tax policies for both independent entrepreneurship and enterprises’ recruitment, they can indicate “tax policies for independent entrepreneurship”, “tax policies for independent entrepreneurship in the graduation year” and “tax policies for enterprises’ recruitment” in the certificate at the same time. In-charge taxation authorities shall affix seals to the Certificates of Entrepreneurship and Employment, indicating the tax deduction (exemption) period.

Article IV The circular shall be implemented from January 1st, 2017 to December 31st, 2019. The preferential tax policies as prescribed by the circular shall be implemented according to the management of filing tax deduction or exemption and taxpayers shall file the record at in-charge taxation authorities. The taxpayers, who will have enjoyed the preferential tax policies for less than three years before December 31st, 2019, can continuously enjoy the policies till the expiration of the three-year term.

If taxpayers had enjoyed the policy as prescribed by Item (II), Article III of Attachment 3 of the Circular of the Ministry of Finance and the State Administration of Taxation on Comprehensively Carrying out the Pilot Project of BT-for-VAT (CaiShui[2016] No.36) for less than three year before December 31st, 2016, they can continuously enjoy the existing policies till the expiration of the three-year term.

Article V The people mentioned in the circular shall not repeatedly enjoy preferential tax policies. Those, who had enjoyed special preferential tax policies for supporting employment in previous years, shall not enjoy the preferential tax policies as prescribed by the circular. If enterprises’ employees conform to both the preferential tax policies as prescribed by the circular and other special preferential tax policies for supporting employment, the enterprises can choose the most preferential policy but cannot repeatedly enjoy both of them.

Article VI The specific implementation measures for the aforementioned tax policies shall be separately formulated by the State Administration of Taxation together with the Ministry of Finance, the Ministry of Human Resources and Social Security, the Ministry of Education and the Ministry of Civil Affairs.

Financial, taxation and human resources and social security departments of all places shall strengthen leadership, make careful deployment, attach great attention to focus groups’ entrepreneurship and employment, actively disseminate and interpret the policies and enhance the coordination and cooperation of different departments to secure the full implementation of the policies. Meanwhile, they shall pay close attention to the implementation of the tax policies and report the problems found out to the Ministry of Finance, the State Administration of Taxation and the Ministry of Human Resources and Social Security level by level in a timely manner.

The Ministry of Finance, the State Administration of Taxation and the Ministry of Human Resources and Social Security

June 12th, 2017

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