For the purpose of further supporting the development of micro and small enterprises, the relevant tax and fee policies are hereby announced as follows:

I. As determined by the people’s government of a province, autonomous region, or municipality directly under the Central Government in light of the actual circumstances of the local region and according to the macro-control needs, a small-scale VAT taxpayer, a small low-profit enterprise or an individual industrial and commercial household may be subject to resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp tax (excluding securities trading stamp tax), farmland occupation tax, educational surtax, or local education surcharges at the reduced tax rate of 50% or less.

II. A small-scale VAT taxpayer, a small low-profit enterprise or an individual industrial and commercial household who has enjoyed the other preferential policies regarding resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp tax, farmland occupation tax, educational surtax, or local education surcharges according to law may also enjoy the preferential policies stipulated in Article I of this Announcement.

III. The small low-profit enterprises mentioned herein refer to enterprises that are engaged in industries not restricted or prohibited by the country, and simultaneously meet the three conditions of having an annual taxable income of not more than RMB 3 million, not more than 300 employees, and total assets of not more than RMB 50 million.

The number of employees includes the number of employees who have established labor relations with the enterprise and the number of employees accepted by the enterprise for labor dispatch. The said indicators "number of employees and total assets" shall be determined by the quarterly average of the enterprise throughout the year. The specific calculation formulas are as follows:

Quarterly average = (Value at the beginning of the quarter + Value at the end of the quarter) ÷ 2

Annual quarterly average = Sum of annual quarterly averages ÷ 4

If the business is opened or terminated in the middle of the year, the actual operating period will be used as a tax year to determine the above-mentioned indicators.

The determination of small low-profit enterprises is subject to the results of filing of annual enterprise income tax returns on a consolidated basis. If a newly established enterprise registered as a general VAT taxpayer is engaged in an industry not restricted or prohibited by the country and meets the two conditions of having not more than 300 employees and total assets not exceeding RMB 50 million at the end of the previous month of the filing period, it can declare to enjoy the preferential policies stipulated in Article I as a small low-profit enterprise before it files annual tax returns on a consolidated basis for the first time.

IV. This Announcement shall be executed from January 1, 2022 to December 31, 2024.

The Announcement is hereby made.

Ministry of Finance and State Taxation Administration
March 1, 2022