China will allow small, micro, and low-profit companies to defer paying taxes until 2021 in an effort to stave off a wave of bankruptcies during the coronavirus pandemic.
China’s State Administration of Taxation said Thursday that it’s deferring tax payments for the May 1 to Dec. 31 period to support smaller businesses that haven’t been able to restart, and reduce pressure on those that have resumed operations.
The policy also includes deferral of most income taxes for small individual or home-based businesses from the same period until 2021.
In general, small companies can range from businesses with annual revenue of 500,000 to 5 million yuan ($70,000 to $700,000), though the policy is broken down further by industries including agriculture, retail, hotels, restaurants, information technology, and a wide range of small service industries.
Micro enterprises are generally any businesses generating revenue below 500,000 per year.