New tax cut measures announced
April 24, 2017 Category Finance, Weekly
China will take new tax cut measures to spur corporate dynamism and competitiveness, Premier Li Keqiang said. Some piloting taxation incentives will be applied to more areas, while the country’s value-added tax (VAT) reform will be consolidated. The tax burden on businesses will be further eased by around CNY350 billion. Starting from July 1, four VAT brackets will be streamlined into three, with tax rates of 17%, 11% and 6% targeting different products. Tax cut incentives for small enterprises with limited profits will apply to a wider range from January 2017 to December 2019. Businesses with profits under CNY500,000, instead of the previous CNY300,000, will be made eligible for preferential measures. Pre-tax deduction for innovation-based tech firms will be further expanded from 50% of R&D cost to 75% from 2017 to 2019. Tax incentives currently given to venture capital firms will be extended to their investment in fledgling high-tech companies from this year in eight regions including Beijing, Tianjin and Shanghai, as well as in the Suzhou Industrial Park. Further tax cuts for commercial health insurance will be applied nationwide, with an upper limit of CNY2,400 to be deducted per person, the Shanghai Daily reports.
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