An update on Tax Changes in China

RELEVANT LEGISTLATIVE CHANGES:

a) Childcare expenses:

Child care expenses for children under age 3 will be exempted from individual income tax up to a certain limit starting from 2022.

b) Corporation income tax:

Corporation income tax rate for small and thin profit tax payers are: 2.5% for profits up to RMB 1 million; 5% (reduced from 10% since 2022) for profits from RMB 1 million to 3 million.

c) VAT:

VAT input balance of small and thin profit tax payers will be refunded in 2022. The total amount will be RMB 2,500 billion.

d) Deductions:

The additional deduction before corporation income tax for R&D expenditures will be increased to 100% from 75% in 2022.

For further information contact Ken Lee at Lee & Lee Associates -  klee@lla.cc

FURTHER READING:

Tax changes in China - December 2021

China implements temporary preferential policies

About Lee & Lee Associates:

Lee & Lee Associates is a professional accounting and business consulting firm dedicated to providing high quality services in accounting, audit, tax, financial due diligence, investment consulting, and business establishment in China. Their clients represent foreign companies, joint ventures, wholly foreign owned enterprises, representative offices, and foreign individuals. Their professionals come from international accounting firms, multinational enterprises, fast-growing small and medium-sized companies and tax authorities. All of their partners are Chinese Certified Public Accountants with over 10 years of working experience. Apart from being CCPAs, some are also members of the Association of Chartered Certified Accountants (ACCA, UK), Chinese Certified Tax Accountants, Certified Internal Auditors and attorneys at law.