The Ministry of Finance and the State Administration of Taxation (SAT) jointly issued a series of preferential tax policies focusing on key areas and key industries of novel coronavirus pneumonia (NCP) prevention and control (Policies), which come into effect since January 1, 2020. The SAT has prepared the 'Summary of the Guidelines for Preferential Tax Policies in Favor of Prevention and Control of the Novel Coronavirus Pneumonia' to give taxpayers a clear picture of the Policies.

The Summary has summarized the Policies in the following four aspects, including:

1. Support the prevention, control and treatment

1. Temporary work allowances and awards obtained for NCP epidemic prevention in accordance with the standard as stipulated by the government shall be exempted from the individual income tax (IIT).

2. Medical protective equipment obtained by individuals from the entities for the prevention of the NCP shall be exempted from the IIT.

2. Support the supply of materials

1. Incremental value-added tax (VAT) credit shall be refunded in full to the key material production enterprises that provide support for the prevention and control of NCP epidemic.

2. Income obtained from transporting key support materials for the prevention and control of NCP epidemic by taxpayers shall be exempted from VAT.

3. Income obtained by taxpayers for the provision of public transportation services, life services and express delivery services for residents’ essential necessities shall be exempted from VAT.

4. The purchase cost of equipment, which is used to expand the production capacity of key material production enterprises for the prevention and control of NCP epidemic, is allowed to be treated as one-off deductible expenses for Enterprise Income Tax (EIT) purpose.

5. Materials imported under the arrangement of the competent authority of hygiene and health and used directly for the prevention and control of NCP shall be exempted from customs duties.

3. Encourage the public donations

Important regulations

Other regulations

1. Direct donations of goods to hospitals which are in charge of the prevention and control of NCP epidemic are allowed to be fully deducted from the calculation of the taxable amount for EIT or IIT.

2. Free donations of goods for the NCP epidemic shall be exempted from VAT, Consumption Tax, Urban Construction and Maintenance Tax, Education Surcharge and Local Education Surcharge.

3. Expand the duty-free import range for donations.

4. Support the resumption of work and production