To continuously support the development of small and thin-profit enterprise, from Jan 2019, government dramatically further expanded the tax exemption and deduction policies for them!

Detailed policies are as below:

1.   Effective from January 1, 2019 to December 31, 2021, for small-scale VAT taxpayers, for which filing tax on monthly, if the total monthly revenue does not exceed RMB 100,000, the value-added tax will be exempted; for which filing tax quarterly, if the total quarterly revenue does not exceed RMB 300,000, the value-added tax will be exempted

2.   Effective from January 1, 2019 to December 31, 2021, for the small and thin-profit enterprises with annual taxable income of less than RMB 1 million, the enterprise income tax rate reduce to 5%; for the taxable portion more than RMB 1 million up to RMB 3 million, the enterprise income tax shall be based on 10%;

Example:

If total annual taxable income (profit) is RMB 1 million, enterprise income tax is RMB 50,000;
If total annual taxable income (profit) is RMB 1.5 million, enterprise income tax is RMB 100,000 (1M*5%+0.5M*10%).

3.   According to the actual situation of the region, the local people's governmental authority may reduce the resource tax, urban maintenance and construction tax, property tax, urban land use tax and stamp duty (excluding stamp duty on securities trading), farmland occupation tax, education surcharge and local education surcharge within the extent up to 50% of the tax amount for small-scale VAT taxpayers.

4.   For small-scale VAT taxpayers which have been legally benefited from the preferential policies on the resource tax, urban maintenance and construction tax, property tax, urban land use tax and stamp duty, farmland occupation tax, education surcharge, local education surcharge as well as other preferential policies, they are still entitled to the preferential policies stipulated in Article 3 hereof.

5.  The criteria of Small and Thin-profit Enterprise is relaxed, new criteria is as below:

Enterprises engaging in the non-restriction and prohibition industry and conforming to the following conditions:

a.   The annual taxable income shall not exceed RMB 3 million;
b.   The number of employee shall not exceed 300;
c.   The total assets shall not exceed RMB 50 million.

From China Business Advisory