Since the outbreak of COVID-19, the State Taxation Administration of China (STA) has implemented the decisions to adopt a series of measures in response to the epidemic and boost economic and social development. Following key measures are initiated by the Chinese government:
I. Rolling out Three Batches of Targeted Tax and Fee Incentives
In order to support the epidemic control and facilitate the resumption of work and production, the Chinese government has successively rolled out following three batches of tax and fee incentives, each of which has a specific target and a distinct priority:
- Providing immediate support to the containing of virus on the frontline
- Relieving enterprises’ burden of social security contributions, reducing their labor cost and boosting their confidence in resuming work and production
- Supporting micro and small enterprises.
From March 1st through the end of May, small-scale taxpayers in Hubei province are exempt from VAT and the VAT rate outside of Hubei province is cut from 3% to 1%. Preferential policies for micro, small and medium-sized enterprises regarding the reduction and exemption of contributions on endowment insurance, unemployment insurance and employment injury insurance can be applied to self-employed traders as well. Local governments are encouraged to support property owners’ reduction or exemption of rent for self-employed traders via urban and township land use tax relief.
II. Implementing Tax and Fee Incentives in a Timely Manner
In order to make sure that tax and fee payers enjoy the preferential policies in a timely manner, the STA has taken following four measures to ensure thorough implementation of tax and fee incentives:
- Timely publicity and guidance for taxpayers.
- Timely formulation of operational guidelines.
- Timely reprogramming of IT systems.
- Timely supervision and evaluation.
III. Promoting “Non-contact” Taxpayer Services
Since the outbreak of COVID-19, Chinese tax authorities have proactively carried out deferral of filing, online processing, multi-channel Q&A’s and on-site service subject to prior appointment to minimize crowding and ensure safety and convenience for taxpayers.
- The deadline for tax filing in February, 2020 has been extended to the last working day of that month outside of Hubei province and to the end of March 2020 in Hubei province, and the deadline for tax filing in March 2020 has been extended nationwide by one week.
- Publish detailed guidance for on-line service.
- Provide personalized service via hotline and Wechat.
In late February, the STA has launched the 2020 Spring Breeze Project nationwide by putting forth 24 measures to improve taxpayer service. Among these, a series of measures to facilitate export tax refund amid the epidemic control has provided export enterprises with more convenience for tax filing and accelerate the refunding process.
