To boost the momentum of work and production, the Chinese government has rolled out further VAT incentives and relief to support business operators who are considered vulnerable to business contraction.
The details of the VAT incentives are as follows:
The Chinese tax authority has offered more VAT credit bonuses to servicing sectors by postponing the policy deadline to a later date through to the end of this year.
The latest policy has enabled more businesses to benefit from the VAT credit refund, which has seen a continuous increase in its beneficiary scope in the recent three rounds, as shown below:
As a tax relief, VAT payments are allowed by the latest policies to be deferred for as long as six months, covering the VAT filings in the last quarter of 2021, and the first two quarters of this year for small, medium and micro enterprises in manufacturing.
It is expected that China’s economy will continue to be impacted by the enduring pandemic. Most of the latest tax incentives or reliefs are believed to be short-lived though relaxed, but are still somehow limited in scope and period. Prompt review and due application is the key to enjoying the maximum benefit, especially in easing short-term cash flow stress.
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