STATE ADMINISTRATION OF TAXATION ANNOUNCEMENT CONCERNING ISSUES RELATED TO EXEMPTING SMALL AND MICRO ENTERPRISES FROM VALUE-ADDED TAX AND BUSINESS TAX (ANNOUNCEMENT [2014] NO.57) (国家税务总局关于小微企业免征增 值税和营业税有关问题的公告)

On October  11, 2014, SAT released Announcement [2014] No.57 (“Announcement 57), specifying issues related to the exemption for small and micro-enterprises  from  value  added  tax  (“VAT”)  and  business  tax  (“BT”), provided  in  circulars  Cai  Shui  [2013]  No.52  and  Cai  Shui  [2014]  No.71. Announcement 57 came into effect retrospectively on October 1, 2014.

The main highlights of Announcement 57 are as follows:

  • Small-scale VAT payers and BT payers with a monthly sales revenue or business revenue not exceeding RMB 30,000 will be exempt from VAT or BT in accordance with the above tax circulars.
  • Small-scale VAT payers and BT payers declaring taxes on a quarterly basis whose quarterly sales revenue or business revenue does not exceed RMB 90,000 will be exempt from VAT or BT in accordance with above tax circulars.
  • Small-scale VAT payers that also conduct BT taxable activities will keep separate accounts of the sale revenue subject to VAT and the business revenue subject to BT. Monthly sales revenue not exceeding RMB 30,000 (or quarterly sales revenue not exceeding RMB 90,000) will be exempt from VAT, and monthly business revenue not exceeding RMB 30,000 (or quarterly business revenue not exceeding RMB 90,000) will be exempt from BT.

Date of issue: October 11, 2014. Date of effectiveness: October 1, 2014.