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China Deferred Tax Q4 2021

The State Taxation Administration ("STA") and the Ministry of Finance ("MOF") have recently distributed the Announcement on Relevant Matters Concerning the Deferral of Some Taxes for Medium, Small and Micro Manufacturing Enterprises for the Fourth Quarter of 2021 (the "Announcement") for implementation from November 1, 2021.

The Announcement specifies the method for recognition of the annual sales of medium, small and micro manufacturing enterprises, making clear that the taxes to be deferred are the enterprise income tax, individual income tax (excluding withholding tax), domestic value added tax, domestic consumption tax, and the supplementary urban maintenance and construction tax, education surcharge and local education surcharge, excluding the taxes paid for requesting taxation authorities to issue invoice, for October, November and December of 2021 (in the case of monthly payment) or for the fourth quarter of 2021 (in the case of quarterly payment). The Announcement also stipulates that medium-sized manufacturing enterprises may defer 50 percent while small and micro manufacturing enterprises may fully defer all taxes specified in the Article 3 of the Announcement. The deferral period will be three months.


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