China Continues to Cut Taxes to Boost Economic Growth

The Chinese government has already cut more than 1.5 trillion yuan ($213.1 billion) in taxes during the first three quarters of this year, amid substantial reductions in value-added tax (VAT) and individual income tax.

The government has reduced the tax burden on businesses by 703.5 billion yuan in this period through VAT reform. Individual taxpayers have paid 442.6 billion yuan less thanks to the policy of cutting taxes, while small businesses have enjoyed preferential cuts of 182.7 billion yuan.

In addition, the government has also cut fees — mostly corporate fees — totaling 272.5 billion yuan.

The two main beneficiaries of VAT reductions were manufacturers and the wholesale and retail sector. The former paid 473.8 billion yuan less in duties, accounting for 31.4% of total VAT cuts. The latter stumped up 325.8 billion yuan less, equivalent to 21.6% of the cuts.

The Chinese government has promised to cut taxes and fees by around 2 trillion yuan this year in order to beef up domestic demand amid a slowdown in the world’s second largest economy, which follows approximately 1.3 trillion yuan of reductions in 2018.

If you want to be sure that your Company is in full compliance, or if you are unsure that your company is fully enjoying the tax cuts or any preferential tax treatment you may be entitled to, feel free to contact us and ask us for a general assessment performed by our professionals.