This Circular provides a series of import tax incentives for the encouraged integrated circuit industry and the software industry. The key points that are worth attention of the Circular mainly include the following:
CMS, China | Chinese Tax Regulation Update | April 2021 Dear Sir or Madam, Please find enclosed our update on the latest developments on Chinese Tax Law. Kind regards, CMS, China
Circular Number Issuance Date Effective Date Topic What is new?
Announcement  No. 11 jointly released by the MOF and the SAT 2021-03-31 2021-04-01 Increase of the threshold of taxable turnover for VAT purposes for small-scale VAT payers From April 1, 2021 to December 31, 2022, small-scale VAT payers with monthly turnover no higher than RMB 150,000 (as opposed to RMB 100,000 provided by the superseded policy) are exempt from VAT.
Announcement  No. 3 jointly released by the MOF and the SAT 2021-03-31 2021-01-01 More preferential policy of R&D cost super-deduction for Corporate Income Tax (“CIT”) purposes The Announcement provides a more preferential policy of R&D cost super-deduction for PRC CIT purposes than the policy given by the PRC CIT Law. The key points that are worth attention of the Announcement mainly include the following:
• Starting from January 1, 2021, manufacturing enterprises are allowed to deduct an additional cost equalling 100% of the R&D cost incurred from taxable incomes for CIT purposes. The super-deduction rate of 100% is already twice the rate of 50% secured by the PRC CIT Law. If the aforesaid R&D costs are capitalized as the company’s intangible asset, the company can deduct 200% of the amortization of the intangible asset for CIT purposes for each period.
• When an enterprise prepays and declares provisional CIT for the third quarter of the current year or for September of the current year, it may, at sole discretion, choose to enjoy the R&D cost super-deduction policy for the first half of the current year based on self-assessment. If such preferential policy is not enjoyed during the prepayment period, qualified enterprises can also enjoy the policy when performing annual CIT declaration for the current year.
Announcement  No. 10 jointly released by the MOF and the SAT 2021-03-22 2021-01-01 Extension of the preferential VAT policies for cultural publicity The Announcement extends the expiry date of the preferential tax policies provided by the circular Cai Shui  No. 53 from December 31, 2020 to December 31, 2023. The preferential policies and the conditions for qualifying for the policies all remain unchanged.
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This information is provided for general information purposes only and does not constitute legal or professional advice. Copyright by CMS, China. CMS, China “CMS, China” should be understood to mean the representative offices in Mainland China of CMS Cameron McKenna Nabarro Olswang LLP, CMS Francis Lefebvre Avocats and CMS Hasche Sigle, working together. CMS, China is a member of CMS Legal Services EEIG, a European Economic Interest Grouping that coordinates an organisation of independent member firms. CMS Legal Services EEIG provides no client services. Such services are solely provided by the member firms in their respective jurisdictions. cms.law Disclaimer Privacy Statement