Chinese Banks to Provide Financial Assistance and Tax Breaks to Small Businesses to Aid Growth

China will provide several incentives, including financial assistance and tax breaks, to domestic micro and small businesses in order to boost their growth. Relevant financial assistance will also be maintained. According to an official statement from the ministry of finance and the state taxation administration, the incentives will be in effect until the end of 2027.

Taxpayers with monthly sales revenue of less than 100,000 yuan will remain exempt from value-added tax (VAT), according to the statement.

Micro and small businesses, as well as self-employed individuals, will continue to benefit from a 1% VAT rate, down from 3% previously, according to a state-controlled news outlet.

Income of lenders from loan interest and guarantee fees related to such small business entities will stay VAT-free, and their loan contracts will continue to be exempt from stamp duty.