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Notice of the Ministry of Finance and the State Administration of Taxation on Preferential Income Tax Policies for Small-scale & Low-profit Enterprises

Document No.:

Taxes:Tax Incentives

Date of Promulgation:2015-03-13

IssueDepartment:Ministry of Finance,State Administration of Taxation

Date of Implementatio:2015-03-13


Finance offices (bureaus), state taxation bureaus and 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 Finance Bureau of Xinjiang Production and Construction Corps.:


To further support the development of small-scale & low-profit enterprises, upon approval by the State Council, the income tax policy for small-scale & low-profit enterprises is hereby notified as follows:


I. From January 1, 2015 to December 31, 2017, for small-scale & low-profit enterprises with annual taxable income of less than RMB 200,000 Yuan (including RMB 200,000 Yuan), their  income is eligible for a reduction of 50% to be included in their taxable income. They are subject to enterprise income tax at the rate of 20%.


The term “small-scale & low-profit enterprises” as mentioned in the preceding paragraph refers to small enterprises with low profits which comply with the regulations of the “Law of the People's Republic of China on Enterprise Income Tax” (hereinafter referred to as the EIT Law) and the implementation regulations thereof.


II. The “number of employees” as mentioned in Paragraphs (1) and (2) of Article 92 of the Implementation Regulations of the EIT Law includes the number of workers who have established  labor relations with the enterprise and the number of dispatched workers accepted by the enterprise.


The total number of employees and the indicators of total assets shall be determined according to the annual quarterly average value of the enterprise. The specific calculation formula is as follows:


Quarterly average value =(value at beginning of the quarter+value at end of the quarter)÷2


Annual quarterly average value=sum of the average value for each quarter÷4


For the opening or termination of business activities in the middle of a year, the relevant indicators shall be determined by considering the actual operating period as a tax year.


The above calculation method shall become effective on January 1, 2015; the implementation of Article VII of the “Notice of the Ministry of Finance and the State Administration of Taxation on Several Issues Concerning the Implementation of Preferential Enterprise Income Tax Policies” (Cai Shui [2009] No.69) shall be terminated simultaneously.


III. Financial and taxation departments at all levels shall cooperate closely and, in strict accordance with the provisions of this Notice, pay close attention to the implementation of preferential enterprise income tax policies for small-sized & low-profit enterprises. At the same time, they must promptly track and understand the implementation of preferential policies, reflect any new problems in a timely manner, and ensure that the preferential policies are put in place.


Ministry of Finance

State Administration of Taxation


March 13, 2015


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