China announces tax and VAT incentives

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The government of China has announced a range of tax incentives including certain reduced rates to boost the Chinese economy. The tax incentive measures include a reduced taxable income threshold for eligible small enterprises to pay corporate income tax on half of their income at a rate of 20%.

Venture capital enterprises may enjoy a 70% tax deduction to invest in non-listed small and medium high and new technology enterprises and special tax treatment for premiums paid to eligible commercial health insurance providers applied on a nationwide basis.

An extension period of 3 years is being applied to the package of existing tax incentive policies due to expire at the end of 2016. The VAT brackets for general VAT taxpayers are being reduced from 4 to 3. All these measures are effective in 2017.

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