Don’t Forget to Take Advantage of These Tax Incentives for Your China Business
Dear Friends,?
Good news! There are different tax incentives that you can make the most of before the upcoming deadline for annual corporate income tax (CIT) filing. But act fast: the deadline is right around the corner – on the 31st of May.
Are you considered a small and low-profit enterprise? Or are you a tech company engaged in research and development (R&D)?
There may be a generous tax sweetener or two in store for you, subject to eligibility requirements being met.
Since 2022, China’s Ministry of Finance and Taxation Bureau have been giving out a slew of CIT goodies to support small and low-profit enterprises and to encourage businesses to invest in innovation.
?? If you’re a small and low-profit enterprise, you can enjoy an effective CIT rate of 2.5% on the portion of annual taxable income below RMB 1 million, and 5% on the portion between RMB 1 million and RMB 3 million. ?
?? If you’re a tech-based SME and have incurred certain types of R&D expenses, you may be eligible for a full deduction on a pre-tax basis of the actual amount on top of the actual deduction.
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In addition, don’t forget to leverage the reduced CIT rate on offer if you operate in any of the following regions in China:
?? Shanghai Lin-gang Special Area
If you’re registered in the Lin-gang Special Area of the Shanghai Free Trade Zone, you may be eligible for a reduced CIT rate of 15% for a period of up to five years from the day of incorporation.?
If you’re a foreign-invested enterprise headquartered in Qianhai, you may be eligible for a reduced CIT rate of 15%. It’s important to check that your line of business falls within the scope of Qianhai’s Catalogue for Encouraged Industries Eligible for CIT Preferential Treatment.
Don’t miss out on the various preferential tax policies that may apply to your China business. Check out what other tax incentives are available to reduce your tax burden.
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Are you unsure whether you qualify as a small and low-profit enterprise? Or do you want to find out which tax incentives are applicable to your China business? Drop us a message. We can check to see if there are ways to optimise your tax position.