How companies in CQ can access new tax benefits

Six taxes and two fees reduction policies: “50% reduction”, "Expanded scope" and 'Benefits superimposition'


“Six taxes and two fees”, namely, resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty (excluding stamp duty on securities transactions), arable land occupation tax and education fee surcharge, local education surcharge


“50% reduction”: From January 1, 2022 to December 31, 2024, the "six taxes and two fees" will be reduced by 50% for small-scale VAT payers, small and medium-sized enterprises and individual industrial and commercial households.

"Expanded scope": The scope of the "six taxes and two fees" preferential policy was mainly applicable to small-scale VAT payers, but now it has been expanded to small and profitable enterprises and individual industrial and commercial entities among general taxpayers.

"Benefits superimposition": while enjoying the policy of "six taxes and two fees", enterprises can access other preferential policies.

In order to ensure that taxpayers enjoy the full amount of tax relief, taxpayers who meet the conditions but do not declare in time to access it can apply for crediting the taxable fees in the future tax period or applying for a refund. For those who apply for crediting the taxable fee of the future tax period, the system will automatically credit the taxable fee of the same tax type when the taxpayer files the next declaration; for those who apply for refunds, the tax reduction will be refunded according to the procedures.


Temporary suspension of pension insurance, unemployment insurance and work injury insurance premiums for industries affected by COVID-19

The policy applies to all enterprises in five industries: catering, retail, tourism, civil aviation and highway, waterway and railroad transportation, which are affected by COVID-19, and the individual businesses with employees and other organizations in these five industries can refer to the implementation. It is important to note that the deferred payment can be applied on the part of pension insurance, unemployment insurance and work injury insurance that should be paid by the companies. For the part from individual employees, enterprises should continue to pay premiums in accordance with the regulations.

During the deferment period, if the employee applies for pension insurance benefits or applies for transfer of pension insurance relations across provinces or systems, the enterprise shall first make up for the deferred basic pension insurance premiums for the employees.


Application for R&D expense deduction extended to science and technology-based SMEs

In 2021, the percentage of add-on deductions was extended to 100% for the first time in the manufacturing industry. This year, the proportion of 100% plus deduction was extended to science and technology-based SMEs.

High-tech enterprises can apply for the preferential treatment of R&D expenses plus deduction, but also pay corporate income tax at 15%.

For example, for a manufacturing enterprise whose R&D expenses in 2021 was 1 million CNY, if all the enterprise's R&D costs counted into the profit and loss, it pays 250,000 CNY less for corporate income tax. If the policy of 100% add-on deduction is followed, the enterprise can also deduct an additional 1 million CNY of add-on expenses, which can save 250,000 CNY of corporate income tax.

Taxpayers who are eligible for the immediate refund policy can apply for the deferred payment first, and then apply for the VAT refund after the deferred payment expired and done the actual tax payment done. Therefore, taxpayers can apply immediate refund policy normally after applying for deferred payment and then paying taxes.