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What tax incentives now are available during the lockdown?
Since 1st.Apr.2022, Shanghai has been under a city-wide lockdown, with some ares even longer. So in order to fully support relevant industries and enterprises to overcome difficulties, resume development and continuously optimize the business environment, the Shanghai Municipal government released <Several policy measures of Shanghai Municipality to fight against COVID and boost the growth of enterprises> (the “policy measures”), which lists 21 measures across six areas. These include tax and fee cuts, financial support, rent cuts for small businesses renting state-owned property, measures that specifically target restaurants, retail businesses, travel agencies and tourist sites, the transportation sector, and the exhibition industry, among others.
Please see the summary as below:
1. Implement large-scale VAT rebate
The government will implement the large-scale tax rebate policy for the value-added tax allowance, give priority to small and micro enterprises, and for small and micro enterprises and individual industrial and commercial households that pay taxes according to the general tax calculation method, the stock tax will be refunded in full at one time before the end of June 2022, and the incremental tax will be refunded in full on a monthly basis from April 1, 2022.
2. Strengthen the policy of reducing taxes and fees
Focus on small, medium-sized and micro enterprises and individual industrial and commercial households, strengthen the implementation of a number of preferential tax policies, exempt small-scale taxpayers from value-added tax in stages, halve the enterprise income tax on the part of small and micro profit enterprises with an annual taxable income of more than 1 million yuan but no more than 3 million yuan, increase the proportion of additional deduction of R & D expenses of science and technology-based small and medium-sized enterprises to 100%, and increase the pre tax deduction of equipment and instruments of small, medium and micro enterprises.
The scope of application of the "six taxes and two fees" reduction and exemption policies such as resource tax, urban maintenance and construction tax, real estate tax, urban land use tax, stamp tax (excluding securities transaction stamp tax), cultivated land occupation tax, education surcharge and local education surcharge will be extended to small low profit enterprises and individual industrial and commercial households, and will be implemented in accordance with the top standard within the reduction and exemption range specified by the state.
3. Extend the time limit for filing and paying taxes
For taxpayers who report on a monthly basis, the time limit for filing and paying taxes in March 2022 will be extended from March 15 to March 31. If it is still difficult to file and pay taxes within the time limit for filing and paying taxes in March 2022 due to the epidemic, they can apply to the tax authorities for an extension of filing according to law.
4. Reduction or exemption of housing rents for small and micro enterprises and individual industrial and commercial households
Small and micro enterprises and individual industrial and commercial households that rent state-owned houses and engage in production and business activities will be exempted from three months’ rent in 2022. If they are listed as the administrative area of Street towns where the epidemic is at medium and high risk in 2022 or their business activities are seriously affected due to the implementation of epidemic prevention requirements, they will be exempted from three months’ rent and six months’ rent in total throughout the year.
Resource: https://www.shanghai.gov.cn/nw12344/20220329/7806f1b92ad84e0e93bf895ebc533d35.html on 29th.Mar.2022