China Further Eases Tax Burden on SMEs and Self-Employed... "Efforts to Revive the Private Economy"

Avoid Excessive Collection, Simplify Tax Payment Procedures Too

China has decided to further ease the tax burden on small and medium-sized enterprises (SMEs) and self-employed individuals amid a sluggish economic recovery.

According to local media on the 7th, the State Taxation Administration announced 28 measures to revitalize the private economy the day before. First, the benefit period for taxpayers who missed out on tax deductions for research and development (R&D) expenses last month will be extended until September. Additionally, after collecting cases of R&D projects, a list will be created and distributed to help more SMEs receive policy support.

They also promised to organize and issue preferential tax policies so that private companies can benefit, and to prevent excessive collection by collecting taxes and fees based on laws and regulations. Tax filing procedures will be simplified by reducing the required documents, and communication channels between local tax authorities and private companies will be established to actively respond to the needs of private enterprises.

Furthermore, they announced plans to improve the advisory function for "cross-border services" and actively resolve tax issues for private companies expanding overseas by cooperating with tax authorities worldwide. The State Taxation Administration emphasized, "We will faithfully implement related measures for the development and growth of the private economy, as well as the continuous recovery and high-quality development of the national economy."

On June 2, the Ministry of Finance of China introduced a policy to reduce the tax burden on micro-enterprises and self-employed individuals for the next five years. For small enterprises with annual taxable income of 3 million yuan (about 550 million KRW) or less and fewer than 300 employees, and self-employed individuals with taxable income below 2 million yuan (about 360 million KRW), personal income tax will be reduced by half. In addition, various taxes such as property tax, land use tax, and stamp duty will be halved for small enterprises, self-employed individuals, and taxpayers who pay less value-added tax.

China is making every effort to revive the private economy as the youth unemployment rate for those aged 16 to 24 reached a record high of 21.3% in June this year, and the second-quarter economic growth rate (6.3%) fell short of market expectations (7%).

This content was produced with the assistance of AI translation services.