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“Upgraded” Tax Reduction Policies Further Benefit Small and Micro Enterprises
2018-11-21 10:51:19

Zhejiang small and micro enterprises have again received a big gift of tax reduction. Recently, the Provincial Taxation Bureau has issued opinions concerning small and micro enterprise parks to support their development, reduce the cost burden of small and micro enterprises, encourage the development of the in-park enterprises, and optimize its tax service. This further upgraded the favorable policy for small and micro businesses.

At present, small and micro enterprise parks are an important platform for many small and micro enterprises in Zhejiang. The Opinions clearly affirms support for the construction of small and micro enterprise parks, including preferential policies to the urban land use tax of small and micro enterprise parks. If the park has indeed difficulties in paying taxes, it may be granted property tax reduction or exemption with the approval of the local tax authority. If the in-park enterprises treat the taxable pollutants properly according to law, they may also be exempted from paying the environmental protection tax of the corresponding pollutants.

In order to help the enterprises in the park to improve quality and efficiency, the Opinions clearly stated that, for newly purchased equipment and instruments between 2018 and the end of 2020 whose unit value is no more than 5 million yuan, it is allowed to be included in the current cost in a lump, which will be deducted when calculating the taxable income of enterprise income tax. If the research and development expenses of the enterprise are not included into the current profit and loss of intangible assets, they shall be deducted on the basis of actual deduction according to regulations from 2018 to the end of 2020, and then 75% of the actual amount incurred in this year shall be deducted. Where an intangible asset is formed, it shall be amortized before tax according to 175% of the cost of the intangible asset. In addition, there are specific implementation plans of policies such as increase of pre-tax deduction limit for expenditure of education, investment credit for energy conservation and environmental protection equipment, and exemption of tax on loan contract.

In addition to the newly added tax preferential policies for small and micro parks, our province has also issued a series of policies to help small and micro businesses reduce their tax burden. From 2018 to the end of 2020, for the small-scale profit-making enterprises whose annual taxable income is less than 1 million yuan, their income shall be deducted by 50% into the taxable income amount and enterprise income tax shall be paid at the rate of 20%.The annual sales criteria of small-scale VAT payers for industrial and commercial enterprises were raised from 500,000 yuan and 800,000 yuan to 5 million yuan. Small and micro businesses that pay urban maintenance and construction tax, property tax and urban land use tax will be deducted or exempted in accordance with the conditions stipulated in the tax law. At the same time, we will continue to carry out the reform of "maximum one visit service procedure", fully implement the tax preferences for “reducing or exempting taxes before levying them”, and optimize the procedures for dealing with enterprise tax cancellation, so as to further improve the tax payment services for small and micro businesses.
 

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