On March 18, 2015, the State Administration of Taxation issued the the State Administration of Taxation Announcement on Issues Concerning the Execution of the Expansion of the Scope of Small Low-profit Enterprises Eligible for Halved Enterprise Income Taxes (hereinafter, the "Announcement") to specifically expand the scope of small low-profit enterprises eligible for halved enterprise income taxes.
The Announcement provides that for small low-profit enterprises whose taxes are levied by way of audit collection, if their tax payment in the previous tax year meets the conditions for small low-profit enterprises with an annual taxable income not exceeding RMB200,000 (inclusive), and if their enterprise income taxes are prepaid based on their actual profits with their actual cumulative profits not exceeding RMB200,000 at the time of prepayment for the year, they are eligible for halved income taxes. If the enterprise income taxes are prepaid based on the average quarterly (or monthly) taxable income in the previous year, such enterprise are also eligible for halved taxes on small low-profit enterprises.
The Announcement also provides that for a small low-profit enterprise subject to fixed-rate taxes which met the conditions for small low-profit enterprises in the previous tax year, if its annual taxable income does not exceed RMB200,000 (inclusive), and if the cumulative taxable income for the prepaid enterprises taxes for this year does not exceed RMB200,000, the enterprise is eligible for halved taxes.
In addition, the Announcement provides that if the actual profit or taxable income of a newly established small low-profit enterprise in this year does not exceed RMB200,000, it can also be eligible for halved taxes.
The Announcement applies to the filing of enterprise income taxes by small low-profit enterprises during 2015 through 2017. The State Administration of Taxation Announcement on Issues Concerning the Expansion of the Scope of Small Low-profit Enterprises Eligible for Halved Enterprise Income Taxes (SAT Announcement 2014 No. 23) was abolished on the day this Announcement was issued.