Tax Exemption Now Available for Companies with Annual Revenue of Up to 200,000 RMB!

By Richard Hoffmann, ECOVIS Beijing China

Always paying too much taxes? China has raised the upper limit of tax exemption for small companies from 100,000 to 200,000 RMB total annual revenue.

Notice on Implementing Preferential Tax Treatment of Small- and Medium-Sized Companies (SAT Notice No. 35, 2015) (“the No. 35 Notice”)

The SAT issued No. 35 Circular to implement the tax reduction decision made by the State Council on 25 February 2015.

The State Council had raised the upper limit of tax deduction from RMB 100,000 to RMB 200,000. That means, small and medium sized companies with their annual revenue not exceeding RMB 200,000 now may apply for a 50% revenue deduction when filing their corporate income tax.

In 2014, there were over 2.46 million small and medium sized companies that benefited from tax deduction. Now with this new decision, even more small and medium sized companies may benefit from the tax preferential treatment. In addition, the SAT’s Notice has simplified relevant procedures to make it easier to enjoy these benefits.

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	Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, America and China for various prestigious law firms prior to joining ECOVIS. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: richard.hoffmann@ecovis.com
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