On 2 April 2021, the State Administration of Taxation (SAT) of China has published Announcement No. 12 of 2021 regarding income tax rate reduction for small and low-profit businesses and sole traders.
The announcement includes that for the portion of annual taxable income of small low-profit businesses not exceeding CNY 1 million, the reduced taxable portion provided by Notice 13/2019 is further reduced by half, i.e. 12.5% (reduce from 25%) of taxable income up to CNY 1 million is subject to tax at a reduced tax rate of 20%. The reductions are effective from 1 January 2021 to 31 December 2022.
