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The implementation period of the VAT reduction and exemption policy for small-scale taxpayers is extended to December 31, 2020

The implementation period of the VAT reduction and exemption policy for small-scale taxpayers is extended to December 31, 2020

In order to further support the general resumption of business for individual industrial and commercial households and small and micro enterprises, the Ministry of Finance and the State Administration of Taxation recently released the “Announcement on Extending the Implementation Period of the VAT Reduction and Exemption Policy for Small-Scale Taxpayers”, which will reduce and exempt VAT tax for small-scale taxpayers. The implementation period of the preferential policy was extended from May 31, 2020 to December 31, 2020.
That is, from March 1 to December 31, 2020, for small-scale VAT taxpayers in Hubei Province, the taxable sales income that apply to 3% levy rate is exempted from VAT; regarding the prepaid VAT items that apply to 3% provisional rate, the prepayment shall be suspended. Except for Hubei Province, small-scale VAT taxpayers in other provinces, autonomous regions, and province-level municipalities, the taxable sales income that apply to 3% levy rate, the levy rate is reduced to 1%; regarding the prepaid VAT items that apply to 3% provisional rate, the provisional rate is reduced to 1%.

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