China’s State Council has doubled the threshold for small companies to benefit from a lower corporate tax rate to those with taxable incomes of up to RMB200,000 (USD32,000), effective from January 1, 2015.
The tax break, which has also been extended by one year from the end of 2016 to the end of 2017, allows eligible companies to reduce their taxable income by 50 percent
The tax break has been extended many times in recent years. The previous threshold of RMB60,000 was raised to RMB100,000 from January 1, 2014.
The State Council pointed out that, in 2014, micro and small businesses in China benefited from tax reductions of RMB61.2bn and RMB40bn, respectively, through a combination of tax breaks and fee exemptions worth more than RMB100bn.
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IMC Group