China’s New Tax Deferment Measures and Extension of Tax Break


Tax deferment measures for manufacturers, individual businesses, unincorporated firms.
According to the executive meeting, the following taxes for the fourth quarter of this year can be deferred: 
 1.  Corporate income tax  CIT , domestic value-added tax VAT, domestic consumption tax, and urban construction and maintenance tax paid by micro, small and medium-sized enterprises MSMEs in the manufacturing sector; 
 2. Individual income tax  IIT  paid by individual businesses, sole proprietorship, and partnership enterprises excluding withholding income tax.

Small and micro enterprises in the manufacturing sector (including individual businesses) whose annual sales revenue is less than RMB 20 million can defer payments on all taxes for the fourth quarter.Medium-sized manufacturing enterprises with annual sales revenue between RMB 20 million to RMB 400 million can have 50 percent of their taxes deferred for the period. However, those with special difficulties can apply to the government for full tax delay.
The tax reprieve will take effect on November 1, 2021. Enterprises are allowed to defer the tax payment for up to three months.The measure is expected to result in deferred tax payment of RMB 200 billion for manufacturing MSMEs by the end of the application period in January next year, according to the State Council. 

Extension of a tax break for overseas institutional investors
In addition, the meeting also decided to extend the period for exempting CIT and VAT on bond interest income earned by overseas institutional investors investing in the domestic bond market to December 31, 2025. The exemption, launched in 2018, was originally scheduled to expire in early November.Following the executive meeting of the State Council, the specific policy on the tax deferment measures is expected to be announced by the State Tax Administration (STA) soon, which enterprises can pay attention to. 

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