Update: China’s legislative response to COVID-19

Most businesses in China are slowly returning to work and resuming business and production. In the meantime, policies implemented by the central and local government may ease the strain on business.

Corporate Income Tax

Qualifying enterprises may deduct the full cost of new equipment without depreciation or those in transportation, hospitality, and tourism may carry the loss over for between five and eight years.

Regional Tax Measures 

Regional tax authorities have issued specific measures to complement national measures. Businesses should connect with a local adviser to determine which policies apply to their business.

Filing Extensions

China’s State Taxation Administration (STA) extended the tax filing deadline to April 24, 2020, nationwide. However, provincial tax bureaus may grant further extensions to businesses experiencing hardship due to COVID-19.

Value-Added Tax

Companies operating in key industries such as supply production, public transportation, delivery and courier services, and the movement of emergency supplies and necessities may qualify for a monthly refund of the VAT. R&D institutions buying Chinese made equipment may also qualify for a full VAT refund. 

Tax Credit for Donations

Financial donations made through recognized organizations towards the fight against COVID-19 qualify for a full deduction on corporate individual income tax. Produced, commissioned, or purchased goods donated through eligible channels qualify for VAT, consumption tax, urban maintenance and construction tax, and education surcharge exemptions. 

Tax Rebates on Exported Products

Companies producing specific goods in China that are destined for the overseas market may enjoy higher tax rebates.

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While this information is correct at the date of publishing, we recommend you contact us for assistance. We are here to help you navigate these various legislative changes, grants, and incentives and the impact they may have on your business.