On 28 February 2022, the Ministry of Finance and State Administration of Taxation of China have jointly issued Announcement No. 2 of 2022 extending the tax payment deferral policy for SMEs especially in the manufacturing sector.
Announcement No. 2 of 2022 provides an extension of the tax payment deferral declared by the Announcement No. 30 to 6-months for the fourth quarter of 2021 for SMEs. The Announcement also clarifies that if a taxpayer qualifying for the extended deferral for the fourth quarter of 2021 has paid tax before the implementation of Announcement No. 2, then the taxpayer may claim a refund and entitles to the extended deferral policy.
Furthermore, to the extended deferral for the fourth quarter of 2021, announcement No. 2 also provides a 6-month deferral for the payment of taxes for the first and second quarters of 2022, including a 100% deferral for manufacturing enterprises with annual sales revenue below CNY 20 million for the small and micro enterprises and a 50% deferral for enterprises with annual sales revenue of CNY 20 million to CNY 400 million for the medium enterprises.
