To continuously promote the policy of tax deduction and exemption, to furtherly support small low-profit enterprises to develop, the Treasury Department and the General Tax Administrative Department decided to issue “Notice of Policy Regarding Preferential Tax Deduction and Exemption for Small Low-profit Enterprises” on March 1st, 2022, indicating that from January 1st, 2022, to December 31st, 2024, governments of provinces, province-level municipalities, and autonomous regions could exempt or deduct resource tax, urban construction tax, property tax, land occupy tax, and stamp duty tax (excluding from stock market), cultivated land occupation tax, additional education tax and local additional tax for Small-scale taxpayers, industrial and commercial individuals and small enterprises without exceeding 50% of the total amount of taxation based on particular situation. The details for Tax Deduction and Exemption policy listed as below:

1. Identified standards for Small Low-profit Enterprises
   
   Small Low-profit enterprise refers to industries involves unlimited and non-prohibited by the country while meets the following conditions:
   
   (1)  Annual taxable income does not exceed RMB 3 million.
   (2)  The number of employees does not exceed 300.
   (3)  The amount of total assets does not exceed RMB 50 million.
   
   The number of workers engaged, including employees contracted with the enterprise and the labor dispatched workers accepted by the company.
   
   Index for the number of employees and the amount of total assets, should be verified through the average of the full year quarter. Formulas as below:  
   Average for each quarter = (beginning value + ending value) ÷ 2
   Full year quarters average = the sum of all quarters average value during the year ÷ 4
   
   Starting or ending business activities in the middle of the year, the enterprise should base the tax year on the actual business term to verify the index above.  
   
   
2. Small Low-profit enterprises should follow the judgement of paid-off Enterprise Income Tax from year-end final settlement. 
   
   

   (1)	During the period of January 1st to June 30th, 2022, small-scale taxpayers in value-added tax, small low-profit enterprise and industrial commercial individuals should confirm if they are permitted to enjoy the preferential tax deduction and exemption owing to the result for year-end final settlement 2020 processed in 2021.
   (2)	Registered as General Taxpayers in value-added tax, taking over unlimited and non-prohibited industries while owning under 300 employees at the end of last month, and not exceeding a total assets amount of RMB 50 million, new enterprises could enjoy the preferential tax deduction and exemption policy before processing the first-time final settlement as regulated.
   (3)	Registered as General Taxpayers in value-added tax, lawfully verified as small low-profit enterprises have completed the year-end final settlement, besides the number 2 regulation, enterprises are permitted to enjoy the preferential tax deduction and exemption policy after the completion of final settlement from July 1st in current year to June 30th of the next year.

   
   
3. Overlay Enjoyment permitted in “Six Tax Two Fees” Preferential Policy 
   
   Small-scaled taxpayers, small low-profit enterprises and industrial commercial individuals who have been allowed for deduction and exemption of resource tax, urban construction tax, property tax, land occupy tax, and stamp duty tax, cultivated land occupation tax, additional education tax and local additional tax, could also enjoy the “Six Tax Two Fees” preferential policy. 
   
   
4. Application method of “Six Tax Two Fees” Preferential Policy
   
   Taxpayers could apply for the “Six Tax Two Fees” Preferential Policy through the Electronic Tax Bureau, no extra documents submission needed. 
   
   
5. Treatment method for delayed application 
   
   Taxpayers who meet the conditions but postponed applying for the “Six Tax Two Fees” Preferential Policy, could claim for tax refund or deduction of paid-off taxation in current tax term after the application of preferential tax deduction and exemption. 

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