On January 9, 2023, the State Taxation Administration issued an Announcement regarding Clarifying the Policies of VAT Reduction and Exemption for Small-scale VAT Taxpayers. The specific contents are as follows:

1. Value-added tax exemption
   
   From January 1, 2023 to December 31, 2023, small-scale VAT taxpayers with monthly sales of less than 100,000 yuan (inclusive) will be exempted from VAT.
   
   
2. Value-added tax reduction
   
   From January 1, 2023 to December 31, 2023, for small-scale VAT taxpayers applicable to 3% levy rate for the taxable sales income, the VAT shall be levied at a reduced levy rate of 1%; for prepaid VAT items with 3% pre-levy rate, the VAT shall be levied at a reduced pre-levy rate of 1%.
   
   
3. VAT additional credit policy
   
   From January 1, 2023 to December 31, 2023, the VAT additional credit policy is implemented according to the following provisions:
   (1) Taxpayers in production service industry can deduct an extra 5% of the deductible input tax in the current period from the tax payable.
   (2) Taxpayers in the life service industry can deduct an extra 10% of the deductible input tax in the current period from the tax payable.
   (3) Other matters related to the application of the additional credit policy shall be implemented according to the other relevant provisions.
   

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