- What are the tax relief policies businesses can take advantage of as they try to resume business in terms of VAT?
Companies engaged in the production of key supplies for epidemic prevention and control can apply for full refund of incremental retained VAT on a monthly basis.
Income derived from the following activities are exempted from VAT:
- transporting key supplies for epidemic prevention and control is exempted from VAT;
- providing public transportation services, life services and express delivery services to deliver daily necessities to residents.
Exemption of VAT, consumption tax, urban maintenance fee, education surcharges relation to materials donated for fighting COVID-19.
Exemption or reduction of VAT payable by small scale VAT payers.
- What are the tax relief policies businesses can take advantage of in terms of Individual Income Tax?
Subsidies and bonuses received by individuals participating in the epidemic control and prevention are exempted from individual income tax.
Employees receiving COVID-19 protection materials from employers can exclude such in-kind benefits from taxable income for individual income tax purposes. Individuals are allowed to claim full tax deduction for donation (whether cash or supplies) made through charity organisations or governments, or directly to hospitals responsible for epidemic control.
- What are the tax relief policies businesses can take advantage of in terms of Business Tax?
There will be looser control on bank loans. Deferral and renewal options are available if the enterprises cannot repay at maturity due to the outbreak of COVID-19. Financial institutions are also asked to appropriately lower loan interest rates and increase credit loans (for both medium-and long-term loans).
Governments at local levels have also adopted policies to support enterprises. For example, the Suzhou Municipal Government has issued policies to coordinate the local banks to issue special loans, reduce the interest rate, and ensure that the loan interest rate is lower than the interest rate in the loan market during the same period.
For losses incurred in year 2020 by companies in the industries significantly impacted (including transportation, catering, accommodation and tourism) during the epidemic period, the carried forward years can be extended from 5 to 8 years if 50% of the company's total revenue is from principal activities in the industry.
- What are the customs related relief or incentive?
Importation of supplies for the purpose of prevention or control of COVID-19 is exempted from customs duties including supplies originally manufactured in the US. Tax refunds can be obtained for previously imposed increased tariff due to the China-US trade war.
There are adjustments to retaliatory tariff for US products where customs tariff increment is reduced from 10% to 5% for products originally manufactured in the US in section 1 and 2 of the attachment of CTC Announcement  No.4, and from 5% to 2.5% for products originally manufactured in the US in section 3 and 4 of the attachment of CTC Announcement  No.4.
- Has the government made it easier for non-residents?
Yes. Non-resident individuals and enterprises may enjoy tax incentive policies issued by MOF and SAT. Overseas investors who reinvest its profits from resident enterprises in the production of epidemic supplies in China may enjoy withholding tax exemption on the profit repatriation. Nonresident enterprises and withholding agents may use e-filings for tax matters. Labor income for the non-resident foreign individual from the overseas purchase of epidemic supplies for domestic enterprises shall not be subject to withholding individual tax.
- Has the government made it easier to obtain credit, financial support and foreign exchange?
Yes. The People's Bank of China ("PBOC"), Ministry of Finance ("MOF"), China Banking and Insurance Regulatory Commission ("CBIRC"), China Securities Regulatory Commission ("CSRC") and State Administration of Foreign Exchange ("SAFE") jointly set out 30 financial measures to support the prevention and control of the coronavirus outbreak, covering credit and financial support, security of financial infrastructure, foreign exchange, and cross-border RMB business.
- What has the government done to make tax filings easier for businesses?
As mentioned above, non-resident enterprises and withholding agents may use e-filings for tax matters. Physical submission requirement for outbound payment tax recordal is cancelled since 1 January 2020.
- What incentives have been provided by utility companies to encourage the resumption of business activities?
In order to encourage a company's resumption, the government requires gas companies to decrease their price if they are following the government price guidance; if the companies are not following the government price guidance, they are encouraged to decrease prices. The electronic power price was decreased by the government. The toll fee is exempted and the port charges have been decreased amid the outbreak of COVID-19.
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