On September 2, 2015, the Ministry of Finance (“MoF”) and the SAT jointly released Circular Cai Shui [2015] No. 99 (“Circular 99”) to further expand the scope of the preferential EIT policy for small and low-profit enterprises provided under Circular Cai Shui [2015] No. 34 (please refer to our Legal Flash of March 2015).

Circular 99 provides that, from October 1, 2015, to December 31, 2017, all small and low-profit enterprises4 can reduce their annual taxable income by 50% and subject it to 20% EIT (the effective EIT rate is 10%).

Before Circular 99, the scope of this preferential EIT policy was limited to small and lowprofit enterprises with an annual taxable income below RMB 200,000.

Date of issue: September 2, 2015. Effective date: October 1, 2015.