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Significant tax cut for micro and small business in 2019

· Tax,Finance

On January 9, 2019, the executive meeting of the state council decided to launch a number of preferential tax relief measures for small and micro enterprises. This is an important part of the tax cut and fee reduction policy in 2019, and also an important manifestation of the larger tax cuts. Here's a summary of this tax cut:

1. Expand the range of preferential taxes for small businesses

The current enterprise income tax and value-added tax on preferential taxes for small and micro enterprises will be expanded to the current level;

8 taxes:

1. Resource tax

2. Urban maintenance and construction tax

3. The real estate tax

4. Urban land use tax

5. Stamp duty

6. Farmland occupation tax

Original 7 and 8: value-added tax and corporate income tax

2 additional taxes:

1. Additional educational taxes

2. District educational taxes

2. Relax the standards for small and micro enterprises


Annual taxable income:

CNY 3 million

Amount of employees:          


Total assets:

CNY 50 million


Annual taxable income:

CNY 1 million

Amount of employees:

Production industry 100, other industry 80

Total assets:

Production industry 30 million, other industry 10 million

3. Introduce Excess progressive calculation method of income tax


For small enterprises with annual taxable income not exceeding CNY 1 million: 5% of the actual tax burden (25%*20%)

For small enterprises with annual taxable income not exceeding CNY 3 million: 10% of the tax burden (50%*20%)


For small enterprises with annual taxable income not exceeding CNY 1 million: 10% of the tax burden (50%*21%)

Taxes are calculated in steps. The amount of taxable income within CNY 1 million shall be 5% income tax. Within CNY 1 million to 3 million, 10% income tax.

4. VAT exemption for small-scale taxpayers will be increased

Now: Monthly sales of CNY 100,000 are exempt from VAT

Previous: Monthly sales of CNY 30,000 are exempt from VAT

5. Improved tax policites for investment of technology start-ups

Venture capital enterprises and angel investors can deduct 70% of their investment amount from taxable income. The criteria is relaex:

Number of employees Total assets and annual sales revenue


300 people CNY 50 million


200 people CNY 30 million

By: FINTEGRITY (may not be reposted without consent)

References: General administration of taxation of China

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