Companies will pay 95% of the original electricity price from February 1, 2020 to July 30, 2020.
From March 1, 2020 to May 31, 2020, lower taxpayers in Hubei province will be exempted from VAT if their tax rate is set at 3 percent. Lower taxpayers in other regions will pay a lower tax rate of 1 percent on taxable sales revenue if their VAT rate is set at 3 percent.
Enterprises engaged in manufacturing key support materials for epidemic prevention and control are allowed to apply for a full refund of the increment of accumulated input-VAT. Regarding tax loss incurred among enterprises significantly affected by the epidemic in 2020, the maximum carry forward period is increased from 5 to 8 years.
Property tax and urban land use tax on landlord are reduced or exempted to encourage the landlord to reduce or exempt rent for tenants.
The loan terms of epidemic-hit enterprises could be extended and they can apply for deferment of repayment of principal and interest payable from January 25 to June 30, 2020. Overdue loan repayments in such period will not be subject to penalties.
Company can obtain training subsidy for conducting online/offline occupational training.
Summary of key tax policies in response to the COVID-19 Outbreak
Employers are prohibited from terminating employees who are on sick leave due to COVID-19, or in mandatory quarantine due to COVID-19, or cannot return to work because their cities are locked down.
The central and local government encourage employers to retrain from laying off their employees or to reduce the number of the layoffs to the minimum extent.
Employers are required to give full pay to the employees who are in quarantine because of being infected with COVID-19 or being close contacts to the COVID-19 patients, or subject to mandatory quarantine, isolations or lockdown of the city.
For small and medium size enterprises and all the enterprises in Hubei Province, the company portion of their contributions to the mandatory pension, unemployment and work-related injury insurances are waived from February to June 2020.
For large enterprises and others non-governmental organizations, the company portion of their contributions to the mandatory pension, unemployment and work-related injury insurances are reduced by half from February to April.
The company portion of the mandatory medical insurance are reduced by half from February to June 2020. Social insurance and tax declaration and payments can be deferred to the end of June.
Refunds of 50-100% of 2019 unemployment insurance contributions are available to eligible companies.
China locked down and sealed off Wuhan in the Hubei Province on January 23, 2020 to contain the spread of COVID-19.
On April 8, China officially lifted outbound travel restrictions and ended the lockdown of Wuhan.
Chinese authorities have removed almost all travel bans and lockdowns across provinces and cities, but some restrictive measures remain effective.
For instance, people are still required to wear face masks and have their temperature tested when entering public spaces, and avoid large scale gathering. In addition, a red-yellow-green three color QR code health scheme is currently being implemented in many cities in China, where the system generates a red, yellow or green color code for each individual based on the individual’s health status, contact history and residence history. Individuals with yellow or red codes are subject to certain restrictions, such as quarantines (typically, 7 days or 14 days, subject to local requirements). Many public areas only allow green code holders to enter.
From March 28, 2020, China suspended the entry of most foreign nationals. China further reduced international passenger flights and shut down some international ports since March.
All provinces now require a period (typically 14 days) of mandatory home-based or centralized quarantine and virus tests for inbound travelers (foreign and Chinese nationals) from overseas, and few cities such as Beijing require a period (typically, 14 days) of mandatory home-based or centralized quarantine for travelers from other Chinese cities.
China is now advancing the resumption of work and production on the premise of effective epidemic containment subject to local regulatory procedures. However, entertainment and leisure facilities, nationwide entertainment activities, cross-border and trans-provincial tourism services remain forbidden or restricted (subject to detailed local requirements).
For exports of the covered medical devices (Disease Test and Detection Kits, Medical Masks, Medical Protective Suits and Other Garments, Ventilators, Infrared Tthermometers), China Customs, as of April 1, requires the exporter to provide a declaration certifying the products have been duly registered in China and conform with the importing country’s quality standards. Customs will verify the medical device registration certifications before releasing the exports. There is an exemption for personal mailing of articles within reasonable quantities. As of April 26, 2020, for products only obtaining foreign authentications or registrations, China Customs requires the exporter to provide a written Export Declaration of Medical Supplies, and will only allow those products on a white list (MOFCOM white list) to be exported.
On April 10, China Customs announced a new measure of statutory inspection process for exports of 11 types of medical devices (including: medical masks, medical protective suits, infrared thermometers, medical ventilators, surgical caps, medical goggles, medical gloves, medical shoe covers, medical disinfection wipes, medical disinfectants, patient monitors) under the covered HS codes. Such statutory inspections are mainly to ensure that the products meet the state quality standards.
As of April 26, 2020 (including sales under a contract signed before April 26th), for non-medical masks, China Customs requires the exporter to submit a Joint Declaration of the Exporter and the Importer and will only allow products (if declared as meeting a foreign standard) on a white list (MOFCOM white list) to be exported, and prohibit those un-qualified on a black list (SAMR black list) from exports.
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