Preferential income tax policies for small and micro enterprises

2020/10/29

Preferential income tax policies for small and micro enterprises


1. From January 1, 2018 to December 31, 2020, the upper limit of the annual taxable income of small and low-profit enterprises will be increased from 500,000 yuan to 1 million yuan, and the annual taxable income will be less than 1 million yuan ( For small and low-profit enterprises (including 1 million yuan), their income is reduced by 50% as taxable income, and corporate income tax is paid at a tax rate of 20%.

The small and low-profit enterprises mentioned in the preceding paragraph refer to enterprises that engage in non-restricted and prohibited industries and meet the following conditions:

(1) For industrial enterprises, the annual taxable income does not exceed 1 million yuan, the number of employees does not exceed 100, and the total assets do not exceed 30 million yuan;

(2) For other enterprises, the annual taxable income does not exceed 1 million yuan, the number of employees does not exceed 80, and the total assets do not exceed 10 million yuan.

2. The number of employees mentioned in Article 1 of this notice includes the number of employees who have established a labor relationship with the enterprise and the number of labor dispatch workers accepted by the enterprise.

The so-called number of employees and total assets indicators shall be determined according to the company's quarterly average throughout the year. The specific calculation formula is as follows:

Quarterly average = (beginning of the quarter + end of the quarter) ÷ 2

Annual quarterly average = the sum of the annual quarterly averages ÷ 4

In case of opening or discontinuing business activities in the middle of the year, the actual business period shall be used as a tax year to determine the above-mentioned relevant indicators.

3. The "Notice of the Ministry of Finance and the State Administration of Taxation on Expanding the Scope of Preferential Income Tax Policies for Small and Low-Profit Enterprises" (Caishui [2017] No. 43) shall be repealed on January 1, 2018.

for example:

If a qualified Chinese small and micro enterprise, the taxable income in 2019 is 2.5 million yuan. then:

1) For the part below 1 million yuan, income tax payable=100*25%*20%=50,000 yuan

2) For the part exceeding 1 million yuan but not exceeding 3 million yuan, the income tax payable = 15050% 20% = 150,000 yuan.

The company needs to pay a total of 200,000 yuan (5+15).

However, if the company's taxable income in 2019 is 3.001 million yuan, the above tax preferential policies cannot be applied.

That is: the amount of income tax payable = 300.0125% = 750,250 yuan.