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China tax policies update 2022 Q4

October 12, 2022 / 2 min read

The China State Taxation Administration recently released tax incentives for small businesses and high-tech enterprises in response to the economic downturn. Businesses with Chinese operations should carefully review the criteria to qualify for the incentives. Our experts explain.

Recently, the China State Taxation Administration (STA) released several tax incentive policies to support the small businesses and high-tech enterprises amid the slow economy. Businesses with Chinese operations should pay attention to the policy updates and take advantage of the relevant tax incentives applicable to their companies.

Here’s a summary of the key incentives:

1. Incentives for high-tech enterprises

High-tech enterprises enjoy one-off pretax deduction of equipment purchased in Q4 2022. Any new equipment and appliances purchased by high-tech enterprises from Oct. 1 to Dec. 31, 2022, are allowed to be deducted in the full amount at one time when calculating the taxable income in the current year of 2022, plus an additional 100% deduction before tax. This policy is applicable to enterprises with a valid high-tech qualification during the fourth quarter of 2022.

2. R&D related incentives

3. Tax deferral period further extended for medium, small, and microsized manufacturers

Taxes and fees withheld and paid on behalf of others aren’t qualified for filing extension.

Table of extended tax deferral due dates based on monthly filing.

Table of extended tax deferral due dates based on quarterly filing.

4. Simplified tax filing procedures for business dormancy and deregistration

Please contact our China tax team with any questions about the specific policies applicable to your organizations in China.

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