Tax incentives
On January 30, 2020, the State Administration of Taxation made it clear that the deadline of tax filing would be extended due to the epidemic outbreak. On February 6, the Ministry of Finance and the State Administration of Taxation proposed that the loss carry-forward period of SMEs in the industries affected by the epidemic in 2020 would be extended from 5 to 8 years. The enterprises, which are unable to pay taxes in time due to epidemic outbreak, can apply for deferred payment. For those key producers and suppliers of materials essential for the prevention and control of the epidemic, and those severely affected, if in any difficulty, the reduction and exemption of urban land use tax and real estate tax can be applied for 2 to 4 months according to regulations of different provinces.
Noteworthy measures:
Shanxi Province: From January 1 to December 31, 2020, 90% discount is provided for the current tax rate within the range of the nationally prescribed tax amount.
Jiangsu Province: For high-tech enterprises and SMEs hard hit by novel coronavirus, the loss carry-forward period will be extended to 10 years.
Social security premium incentives
On February 8, the Ministry of Human Resources and Social Security stated that insured enterprises and individuals are allowed to defer payment of social security premium, and the rights and interests of the individuals will not be affected. The payment should be completed within 3 months after end of the epidemic situation.
The decision was made at the State Council executive meeting chaired by Premier Li Keqiang on February 18 that SMEs will be exempted from pension, unemployment and work-related injury insurance premiums periodically, the total of which is expected to be up to 500 billion yuan nationwide. At the same time, before the end of June, enterprises can apply for deferred payment of housing provident funds, while employees unable to repay their housing provident funds due to the epidemic situation would not be overdue.
For SMEs affected by the epidemic and having difficulties in production and operation, they can apply to reduce deposit ratio of housing provident fund. The minimum can be reduced to 5% as nationally prescribed, and the period does not exceed one year. For those that are indeed unable to pay the housing provident fund in full and meet the deferred payment requirement, the enterprises may be allowed to defer payment for up to one year. On February 22, the National Medical Insurance Bureau prescribed that starting from February 2020, provinces could halve the contribution ratio of enterprises on employees’ medical insurance, according to the fund ’s operating conditions and actual demands, while ensuring the medium- and long-term balance of revenue and expenditure. The period of reduction shall not exceed 5 months.
Noteworthy measures:
Shanghai: The Enterprises’ contribution ratio of employees’ medical insurance premiums will be lowered by 0.5% in 2020;
Reducing rents
For SMEs that lease the state-owned assets, if they resume or stop their production and operation activities in accordance with government requirements or regulations of epidemic prevention and they do not lay off employees or have few layoffs, the enterprise can be exempted from rent for 2 to 4 months according to the respective measures of the provinces. For those that lease the commercial real estates, the commercial property owners are encouraged to reduce or exempt the rents for SMEs. For the entrepreneurship carriers, such as tech parks, incubators, universities tech parks, maker spaces and entrepreneurship bases, would be subsidized if they reduce the rents for SMEs.
Noteworthy measures:
Nanning, Guangxi Province: Subsidies will be given to the commercial property owner who reduce or exempt the rents for SMEs. During the period of February to June, if the rent reduction or exemption totals exceeds 1 million yuan and the reduction or exemption ratio reaches 30% of the rent, or rent reduction or exemption exceeds 500,000 yuan and the reduction or exemption ratio reaches 50% of the rent, 15% of the total rent will be given to the commercial property owner at large, which will not be more than 2 million yuan.
Sichuan Province: Provincial government will provide subsidies as less than 50 percent of the rent reduction to the entrepreneurship incubation bases which reduce or exempt rents for SMEs, and the total amount of subsidies for each base shall not exceed 2 million yuan.
Fujian Province: The practice of Fujian Province is to provide an operating subsidy for no less than 3 months, the standard of which is 30% of the total rent reduction or exemption.
Waiving administrative fees
Some kinds of administrative fees would be exempted and the subsidies would be provided for the SMEs in service industries which have been seriously affected.
Noteworthy measures:
Beijing: Some administrative fees will be exempted from SMEs, including special equipment inspection fee, sewage treatment fee, and road occupation fee, which is estimated to save 70 million yuan for all the eligible enterprises per month totally.
Guangdong Province: 6 months of urban sewage treatment fees will be refunded to the enterprises affected by the epidemic.
Hangzhou, Zhejiang Province: For small and micro enterprises in the industries of commerce, catering, tourism, accommodation, transportation, logistics and delivery, with an annual tax of less than 500,000 yuan, the government will grant two months subsidies.