Tax break for small firms

CHINA has unveiled taxbreak policies to reduce the corporate burden on small and micro-sized businesses and support economic growth. From December 1 this year to December 31, 2019, financial institutions will be exempt from value-added taxes on income from interests for loans to small, micro-sized and individually owned businesses, according to a document released by the Ministry of Finance and the State Administration of Taxation. Currently, the policy applies to loans to farmers only. The maximum loan to each of the aforementioned borrowers that is eligible for a tax exemption is 1 million yuan (R2.1m), the document said. Meanwhile, stamp taxes on loan contracts for small and micro-sized businesses will be exempt from January 1, 2018 to December 31, 2020. The government has been encouraging banks to support small businesses, which often have difficulty obtaining bank loans.