Since 30th, January, the State Taxation Administration has issued a Notice on optimizing tax payment services to do a good job in the prevention and control of the outbreak of novel coronavirus infection pneumonia. Following the notice, the People's Bank of China, the Ministry of Finance, the Bank of China Insurance Regulatory Commission, the CSRC and the Foreign Exchange Bureau also launched various financial measures. The Ministry of Human Resources and Social Security issued initiatives to stabilize labor relations and support the resumption of work so as to protect enterprises. At the same time, Shanghai, Beijing, Sichuan and other places have introduced a series of blockbuster policies, hope to effectively support small and medium-sized enterprises to overcome the difficulties through increasing support to reduce the tax burden, enhancing financial, fiscal and tax support and intensifying support for the stabilization of employment and other means.
1. The State Taxation Administration and the Ministry of Finance issued preferential tax policies for epidemic prevention and control
Individual income tax
（1）Individual income tax is exempted from temporary work subsidies and bonuses obtained in accordance with the standards prescribed by the government for medical staff and other personnel, who fight for epidemic prevention and control.
（2）Physical objects, such as medicine, medical supplies and protective supplies (excluding cash) issued to individuals to prevent new coronavirus infections pneumonia, are not included in wages and salaries and are exempt from individual income tax.
（3）Full tax deductions are exempted for donations, including cash and physical objects, by individuals through nonprofit organizations and governments above the county level for the epidemic prevention and control.
（4）Full tax deductions are exempted for donations by individuals directly to hospitals responsible for the epidemic prevention and control. Donors handle pre-tax deductions depending on donation receipt letters issued by those hospitals.
Value-added tax and other related tax
（1）Enterprises producing key protection materials for the epidemic prevention and control can apply to the tax authorities monthly for a full refund of the incremental value-added tax allowance.
（2）People working for the transportation for key protection materials for epidemic prevention and control will be exempted from the value-added tax.
（3）People working in the transportation, life service and daily necessities delivery service sectors will be exempted from the value-added tax
（4）Moderately expand the scope of duty-free imports stipulated in the Interim Measures for the Exemption of Import Tax on Charitable Donations from January 1, 2020 to March 31, 2020. Import duties, import value-added tax and consumption tax are exempted from donations for epidemic prevention and control.
（5）Customs duties are exempted from imported materials directly used for the epidemic prevention and control organized by the health department.
（6）Value-added tax, consumption tax, urban maintenance and construction tax, education surcharges, and local education surcharges are exempted from goods produced, commissioned to process or purchased by units and private businesses and donated free of charge directly or through nonprofit organizations and governments above the county level to hospitals responsible for the epidemic prevention and control.
Business income tax
（1）Newly purchased equipment by enterprises producing key protection materials for the epidemic prevention and control for the expanding of capacity are allowed a one-time accumulation of the current cost before the enterprise income tax deduction.
（2）Losses logged in 2020 for companies in seriously affected sectors can be carried over to an extended period from five years to a maximum period of eight years.
（3）Full tax deductions are exempted for donations, including cash and physical objects, by enterprises through nonprofit organizations and governments above the county level for the epidemic prevention and control.
（4）Full tax deductions are exempted for donations by enterprises directly to hospitals responsible for the epidemic prevention and control. Donors handle pre-tax deductions depending on donation receipt letters issued by those hospitals.
Other departments introduce relevant supportive policies
In addition to the tax preferential policies jointly issued by the Ministry of Finance and the General Taxation Administration, the National Development and Reform Commission, the Chinese People's Bank, the CSRC, the Banking Regulatory Commission, the State Administration of Foreign Exchange and the Ministry of Human Resources and Social Security and other important departments have also issued a number of preferential policies to support enterprises and individuals to get through the outbreak smoothly , the main contents are summarized below:
Reduction of partial related administrative business fees
（1）The registration fee for medical device products entering the emergency approval procedure of medical device products and products related to the prevention and control of new coronavirus (2019-nCoV) will be exempted. The registration fee for drugs entering the emergency approval procedure of drugs and products related to the treatment and prevention of new coronavirus (2019-nCoV) will be exempted.
（2）Airline payment to the government's civil aviation development fund is waived.
Financial credit incentives
（1）Financial discount support for key enterprise loans for epidemic prevention and control. For loans of new key protection enterprise in the epidemic prevention and control in 2020, the central government finance ministry shall give a discount of 50% of the re-loan interest rate of the People's Bank of China on the basis of the preferential interest rate credit provided by the special re-loan supporting financial institutions of the People's Bank of China. The discount period shall not exceed 1 year, and the interest-bearing capitals shall be allocated from the special funds for the development of inclusive financial development;
（2）Increased discount support for entrepreneurship guarantee loans to individuals and enterprises severely affected by the epidemic. For individual entrepreneurship guarantee loans issued, if the borrower suffers from the new coronavirus infection pneumonia, he may apply to the loan bank for extended repayment. The extension period shall not exceed 1 year in principle. The financial department shall continue to give discount support, and shall not apply to the Measures for the Management of Special Funds for the Development of Inclusive Financial Development (Finance (2019) No. 96) on the provision of "Renewal, Overdue entrepreneurship guarantee loans, the financial department does not offer discount". Local financial departments at all levels, together with relevant parties, should give priority to supporting the applications for entrepreneurship guarantee loans of individuals and small micro-enterprises who have temporarily lost their income sources as a result of the epidemic.
3. Supportive policies in Beijing, Shanghai and Guangzhou
In order to fight against the epidemic in full force and to reduce the difficulties caused by the epidemic to businesses and individuals accurately and effectively, Beijing, Shanghai and Guangzhou have introduced relevant preferential measures, including fiscal and taxation, employment and financial credit and other related supportive policies. Summaries are as below:
Relevant supportive policies in Shanghai
Fiscal and taxation support
（1）Implementation of the training fee subsidy policy. For all tiers of enterprises in the city affected by the epidemic, those who organize employees (including labor dispatchers in the enterprise) to participate in all kinds of online vocational training during the shutdown shall be included in the scope of training for enterprise workers subsidized by additional special funds for local education in each district, and shall enjoy 95% subsidy for the actual training costs. Platform enterprises (e-commerce enterprises) and new industry enterprises can carry out by reference.
（2）New purchased equipment by enterprises producing key protection materials for the epidemic prevention and control for the expanding of capacity are allowed a one-time deduction before income taxation. The value-added tax incremental retention shall be fully refunded. People working in the transportation, life service and daily necessities delivery service sectors will be exempted from the value-added tax. The registration fee for drugs and medical device products related to the prevention and control of new coronavirus (2019-nCoV) will be exempted. Airline payment to the government's civil aviation development fund is waived. The municipal finance ministry shall give a full subsidy for the policy losses arising from the production costs higher than the actual selling price of the designated key epidemic prevention materials produced by the enterprises requisitioned by the government emergency. If the key epidemic-prevention materials that had been signed for export have been purchased by the government and sold domestically, the enterprise shall not bear additional tax collection. Enterprises and individuals take the responsibilities of fighting against the epidemic in the epidemic prevention and control shall be commended.
（3）Import duties, import value-added tax and consumption tax are exempted from Imports donated for epidemic prevention and control. Customs duties are exempted from imported materials directly used for the epidemic prevention and control organized by the municipal health department and the tax-exempt amounts that have been levied shall be refunded.
（4）The period of social insurance contributions may be extended. Influenced by the epidemic, the city's social insurance insured units, flexible employment personnel and urban and rural residents failed to register insurance or pay social insurance fees and other business in time, are allowed to make up after the epidemic. The insured unit who pays the social insurance premium within the time limit, shall not be surcharged the overdue payment after it has been submitted to the municipal social security agency, and the record of the individual rights and interests of the insured employees shall not be affected. The relevant supplementary payment procedures may be completed within 3 months after the lifting of the epidemic.
（5）During the period of epidemic prevention and control, taxpayer who has difficulty in filing the declaration within the statutory time limit due to the impact of the epidemic may apply for further extension according to law. If it is difficult to pay the tax on time due to the influence of the epidemic and the conditions for deferring the payment of tax are met, the deferred payment of the tax shall be granted in accordance with the law, with a maximum period of not more than 3 months. Taxpayers who fail to declare and pay their taxes on time due to the epidemic may be exempted from the corresponding late fees and tax administrative penalties after confirmation by the tax authorities.
（6）Enterprises that take the initiative to reduce the rent of property or land for tenants do facing with difficulties to pay property tax and urban land use tax may apply for reduction or exemption of corresponding property tax and urban land use tax.
Stabilizing employments support
Continue to implement the policy of returning unemployment insurance to stabilize employments. In 2020, 50% of the total amount of unemployment insurance premiums actually paid by enterprises who do not lay off workers or reduce their staff number, and meet the requirements will be returned to the employers and their employees.
Adjust the year of social insurance contributions for workers. From 2020 onwards, the start and end date of the annual social insurance contribution for employees of this city will be adjusted to July 1st to June 30th of the following year. The annual social insurance contribution of the city's employees in 2019 will be extended to June 30, 2020.
Financial credit support
Encourage the branches of development, policy, state-owned large commercial banks in Shanghai and local corporate banks to actively take use of special re-lending policy of the People's Bank of China, providing preferential interest rate loans to the key enterprises including small and medium-scale enterprises who focus on the production, transportation and sales of major medical prevention and control materials and living necessities. The financial ministry gives another half of the discount to ensure the enterprises loan rates are less than 1.6%. Support financial institutions in Shanghai to contribute the funds raised for epidemic prevention and control related areas through the issuance of financial bonds, specific-purpose bonds, etc.. to relevant fields for epidemic prevention and control.
Relevant supportive policies in Beijing
Fiscal and taxation support
Import duties, import value-added tax and consumption tax are exempted from Imports donated for epidemic prevention and control from January 1, 2020 to March 31, 2020. Customs duties are exempted from imported materials directly used for the epidemic prevention and control organized by the municipal health department and the tax-exempt amounts that have been levied shall be refunded; Extending the collection period of social insurance premiums payable in January and February to the end of March. For tourism, accommodation, catering, exhibition, trade and circulation, transportation, education and training, literary and artistic performances, film and theater, ice and snow sports and other severely affected sectors and enterprises, the collection period for social insurance premiums payable during the affected period of the epidemic may be extended to the end of July after confirmation by the relevant industry authorities. During the period of overdue payment, no late fee shall be collected, the normal enjoyment of various social insurance benefits shall not be affected, or the record of individual rights and interests.
Employment stabilizing support
Enterprises who affected by the epidemic and ended in difficulties in production and operation may stabilize the employment by means of adjusting compensation, rotation, shortening working hours and waiting for job assignment by consensus with employees, so as not to lay off employees or lay off fewer. Eligible enterprises may receive the return of unemployment insurance premiums in accordance with the provisions.
Financial credit support
（1）Do not draw off, quit or put stress on loans for enterprises who face with temporary difficulties in operating due to the epidemic but have bright development prospects. Do a good job of loan renewal services for relevant enterprises and strive to make sure of a thorough and quick loan renewal. Start the online loan renewal mechanism.
（2）Establish special funds pool for epidemic prevention and control which mainly used for the city's medical materials reserves, equipment and protective materials needed by medical and health institutions in carrying out epidemic prevention and control. Support enterprises producing material required for the prevention and control of the epidemic to implement technical transformation to improve quality and increase production capacity. Support other enterprises to quickly form production capacity by increasing production lines for materials required to prevent and control the epidemic, and provide investment subsidies or loan discount for projects effectively releasing production capacity.
Relevant support policies in Guangzhou
Fiscal and taxation support
During the period of epidemic prevention and control, enterprises are allowed to defer the declaration of tax. For enterprises that meet the conditions for deferred tax payment, the period of tax payment shall be extended for not more than three months in accordance with the law. Enterprises that do have difficulties in paying taxes shall be reasonably exempted from property tax and urban land use tax in accordance with the law. Adjust the quota reasonably or simplify the procedures for closure for "regular quota" households. Implement policies such as inclusive tax reductions for small and micro-enterprises timely.
Employment stabilizing support
During the period of epidemic prevention and control, enterprises are allowed to defer the declaration of tax. For enterprises that meet the conditions for deferred tax payment, the period of tax payment shall be extended for no more than three months in accordance with the law. Enterprises that do have difficulties in paying taxes shall be reasonably exempted from property tax and urban land use tax in accordance with the law. Adjust the quota reasonably or simplify the procedures for closure for "regular quota" households, Implement policies such as inclusive tax reductions for small and micro-enterprises timely.
Financial credit support
After approved, Micro-credit companies with excellent regulatory indicators may relax the leverage of financing to 5 times the net assets. The upper limit of loans of single-households will be raised to no more than 5% of the registered capital and not more than 10 million yuan. Encourage lowering lending rates, delaying or extending loans for 1-3 months, exempting 1-3 months penalty and increase credit and medium- and long-term loans for enterprises and individuals affected by the epidemic.
The current epidemic will have a major impact on China's economy and society, and the recent introduction of supportive policies at different levels and in different fields is expected to reduce the economic losses of enterprises and individuals. However, with supportive measures being released and enterprises and individuals facing an increasingly complex policy environment, Mazars recommends that enterprises and individuals seek more professional assistance so as to fully enjoy the preferential policies benefits and reduce losses.