L. Riccardi, Chinese Government Subsidizes Small Local Firms, 25.9.2014 - Expat Briefing Wolters Kluwer
In order to promote small businesses’ growth, and to give an extra boost to national economic growth, the Government offers tax breaks. From Oct. 1 to the end of 2015, any company with monthly revenues under CNY 30,000 will be exempted from value-added tax and business tax, according to a statement. The current threshold for this favorable policy is CNY 20,000.
The move comes after the State Council announced in April that companies with annual taxable income under 100,000 yuan will have their business income tax halved from Jan. 1 this year until the end of 2016. The reason for these incentives is that Premier Li Keqiang considers small and micro firms the "main force" of development, the "main channel" for job creation and an "important source of innovation."
The government also said it will use incentives to encourage financial institutions to provide more finance to small firms. Furthermore, additional subsidies will be provided to small firms employing people with difficulties in finding jobs, as well as free training to help them secure big data information services supported by cloud computing.
The State Council urged all regions and departments to make sure all these policies are implemented as soon as possible. Small and micro firms are a vital foundation for Chinese economic growth. By the end of 2013, there were about 11.7 million such companies in China, accounting for 76.6 percent of the total number of firms in the country.