China – local measures in response to the pneumonia outbreak
Most of the companies operating in the territory of the People’s Republic of China are facing significant difficulties in resuming their activities and business operations after the pneumonia outbreak occurring in these days.
After a meeting held on January 30th, 2020, the State Administration of Taxation has extended the tax reporting deadline from February 17th to February 24th, 2020. In order to provide relief, several local authorities have issued specific measures in response to the pneumonia outbreak, including the reduction of the burden on enterprises, the deferral of some tax payments and the increase of the financial support for enterprises greatly affected by the current circumstances.
The local measures come along with national ones, such the injection of 1.2 trillion RMB announced by the People’s Bank of China on February 2nd, in order to maintain the liquidity in the bank system during the period of prevention and control of the pneumonia outbreak and the decrease of the financing and loans costs as provided in the circular issued by the Ministry of Finance on February 3rd.
The Human Resource and Social Security Bureau of Shanghai and the local district governments of Shanghai Municipality have announced several measures to be implemented, in order to grant a certain relief to local enterprises and to ease their social security burden.
Stabilizing the workforce
Enterprises that do not layoff nor reduce the workforce could obtain 50% of the actual amount of unemployment insurance contributions paid in the previous year. In addition, the yearly adjustment of the contribution basis will be postponed by three months to July 1st. The enterprises that are unable to pay social insurance contributions due to the pneumonia outbreak, could apply to defer the payment. However, the supplementary payment shall be made up within three months after the end of the outbreak emergency.
Subsidies for online training
Enterprises arranging their employees to participate in online vocational training during the business suspension period could enjoy a subsidy equal to 95% of the actual training cost.
Increase of the financial support
The districts of the Municipality have issued additional measures, aiming to increase the financial support to the small and medium enterprises from the bank system, to ease the