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Chinese Premier Outlines Less Burdensome Corporate Tax Regime

Streamlining administrative processes and cutting taxes and fees, while improving the overall business environment and reducing corporate tax burdens were among the priorities outlined by Li Keqiang, the Chinese Premier, when he presented the Report on the Work of the Government on 5 March this year.

More specifically, he called for the following changes to China’s current tax regime:

  • Improving the value-added tax system by switching from a three-tier tax rate model to a two-tier arrangement, while lowering the tax rates for certain sectors (including manufacturing and transportation) and raising the annual sales revenue threshold for small-scale taxpayers, ensuring they qualify for the appropriate tax benefits
  • Substantially expanding the eligibility parameters for a 50% reduction in enterprise income tax in order to ensure that a greater number of small and micro businesses meet the criteria
  • Raising the pre-tax deductions limit relating to the purchase of new equipment
  • Implementing a comprehensive tax credit policy that extends to overseas income sources
  • Expanding the scope of the land use tax concessions related to the construction of warehouses by logistics companies
  • Continuing to offer concessions on land appreciation tax, deed tax and other taxes to enterprises undergoing reorganisation

Among the other proposed measures is a move to raise the individual income tax threshold, while allowing expense deductions for items such as children’s education and treatment for serious illnesses. This latter proposal is intended to reduce individual tax burdens and reward hard work.

For further details, please visit the following link:

Premier Delivers Government Work Report 2018

Content provided by Picture: HKTDC Research
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