April 2024 - A comprehensive set of policy measures in Shanghai is implemented to lighten the burden of SMEs

Reductions on Taxes and Fees

Fully and sequentially implement the preferential policies for reducing taxes and fees, mainly include:

·       VAT credit carryforward refunds

·       Weighted VAT Deduction for Advanced Manufacturing Enterprises

·       Raising the Proportion of Weighted Pre-tax Deduction of the R & D Expenses

·       50% cost reduction on “Six taxes, Two fees” for small-scale VAT taxpayers, small-profit enterprises, and individual households

Reductions on Enterprises’ Labor Costs

·       Reduce the employers’ contribution to the basic medical insurance for employees by 1%, from 10% to 9%, from March 2024 to February 2025

·       The unemployment insurance rate will be maintained at 1%, with both the employer and employee contributing 0.5% each, continuing the reduced rate from May 2023 to December 2024.

Refund Unemployment Fund

To provide financial relief and support for job stability:

·       A refund of up to 60% of the unemployment fund paid in 2023 for SMEs

·       For large enterprises, a refund up to 30% of the unemployment fund paid in 2023

Conditions of SMEs

An enterprise shall meet all the following criteria to be classified as SMEs:

·       Enterprises engaging in non-restricted and non-prohibited businesses

·       Annual taxable income amount does not exceed CNY 3M

·       Headcount does not exceed 300 employees

·       Total assets do not exceed CNY 50M

We will keep you posted on any further preferential policies published.

We remain available should you have any questions. Please do not hesitate to reach out to your Mazars point of contact.

Reference:

Shanghai Municipal People's Government, HuFuBanGui[2024] No.4: Notice on issuing several policy measures in Shanghai to lighten the burden of SMEs(link here in Chinese).