New Tax Incentives and Planning Tips for Companies and Individuals in China 2022Source:原创 Key Words
“ In the face of the new economic downward pressure, with the conclusion of the China Two Sessions in 2022, more tax incentives are implemented to meet the needs of market players. Favorable policies affecting the investment decisions of businesses and individuals have been adopted. On April15, 2022, amid the global wave of interest rate hike, the Long-awaited "monetary easing" policy in China market finally landed. Compared with the tightening of 2021, policies of fiscal, credit and real estate will be loosened in 2022. Domestic demand is expected to rise, tax collection and management for high-income individuals will continue to be strengthened. Under the new development pattern, companies and individuals should pay close attention to the corresponding tax policies to reduce cost and improve yield of the investments. ” 01 — Corporate Income Tax (CIT) Planning The specific new preferential policies on Large-scale tax reductions focus on manufacturing and service industries
3. Cost on Electronic equipment newly purchased by SMEs in 2022 with a unit value of more than 5 million yuan and a minimum depreciation life of 3 years can be deducted before tax in the same year; 50% of the unit value of equipment with a minimum depreciation life of 4, 5 or 10 years can be deducted before tax in the year of purchasing Tax Incentives on New Purchase of Equipment Worth More Than 5 million yuan 9. The qualified third-party companies engaged in pollution prevention and control will receive preferential CIT at a reduced rate of 15% until December 31, 2023. 10. On March 24th, the Ministry of Finance and State Taxation Authorities jointly announced that all small-scale VAT taxpayers with applicable value-added tax rate of 3% in China would be exempt from VAT from April 1st, 2022, until December 31st, 2022. VAT prepayment would be suspended for projects with rate of 3%. 02 Individual Income Tax (IIT) Planning 2022 preferential tax policies that individual taxpayers should pay close attention to for tax planning 1. The expenses for caring of children under the age of three will be included into special additional deductions for IIT in light of Improving support to the three-child policy 2. Separate tax on Equity incentives for listed companies will be extended to December 31,2022 3. Individual tax incentives for venture capital companies and angel investors will be extended to December 31, 2023 4. The policy of annual lump sum bonus will not be incorporated into the monthly salary income but taxed separately on monthly basis will be extended to the end of 2023 5. Foreign IIT incentives are extended until December 31, 2023(Please Click here to know more aboutForeign Individuals Tax Optimization on China IIT) Since 2021, news about entertainment celebrities and anchors being fined for tax evasion has send out important signal that tax collection and management for high-income individuals will continue to be intensified in 2022. The overall monitoring of China tax system is strengthened by implementing GTS Phase IV, Tax planning hasbecome a big issue that businesses and individuals have to consider no matter for the purpose of tax reduction or risk prevention. How should companies and individuals take advatages of tax incentives and record the deductions properly? Our services cover: 1. Compliance and planning in accordance with GTS and VAT regulations 2. Structuring 3. Investment and financing strategies 4. Incorporation of new entities 5. Financial and non-financial planning (insurance, trust, tax planning, retirement, and estate planning) 6. Year-end bonus tax optimization planning 7. Net assets and financial analysis report Please feel free to contact us for customized planning and solutions. |