How to Benefit from Chinese Government Incentives for Foreign Small and Medium Enterprises?
Corporate Income Tax Incentives for Small and Low-Profit Enterprises All types of small and low-profit enterprises in China can benefit from a reduced corporate income tax rate of 20% with reduced tax base: Annual Taxable Income Tax Base Tax Rate Effective Rate Effective Period Portion less than 3 million yuan Income × 25% 20% 5% 2023.1.1 – 2027.12.31 Eligibility Criteria for Small and Low-Profit Enterprises: VAT Incentives for Small-Scale Taxpayers Monthly Sales Amount Quarterly Sales Amount VAT Incentives Additional Reductions Less than 100,000 yuan Less than 300,000 yuan VAT exemption (2023.1.1 – 2027.12.31) Education fee exemption High and New Technology Enterprises (HNTEs) The reduced tax rate for qualifying enterprises is 15%. Loss carryforward is also allowed for up to 10 years instead of 5 years for ordinary enterprises. Qualification Criteria: Technology-Based Small and Medium Enterprises (TSMEs) Enjoy the same 10-year loss carryforward benefits, plus super deductions for R&D expenses: