Mar 2017, Issue 6
The past year, 2016, was the first year of the 13th Five-Year Plan, with remarkable achievements in fiscal and taxation reform in China (the Reform). 2017 will be the year of deepening such Reform, what initiatives will be pushed forward by the Chinese Government? The answers were delivered at the Fifth Session of the 12th National People’s Congress (NPC) on 5 March 2017 (the Session). During the Session, Premier Li Keqiang spoke on the government work report for the new year (the Work Report) 1, which reviewed the accomplishments made in 2016 and deployed the key tasks for 2017. The major fiscal and taxation tasks include simplifying the Value Added Tax (VAT) rate categories, increasing the percentage of Research and Development (R&D) expenses super deduction for Corporate Income Tax (CIT) purpose for small and medium-sized technological enterprises, relaxing the threshold for qualified small and thin-profit enterprises to enjoy CIT preferential treatments, and further standardising and eliminating the non-tax burden of the enterprises. Following that, the Minister of the Ministry of Finance (MOF), Mr. Xiao Jie shared his views in the MOF press conference held on 7 March 20172 in respect of a series of hot topics regarding the reform, including the status of the Individual Income Tax (IIT) reform as well as the extension of the valid period of certain tax incentives.
In this issue of News Flash, we will introduce the highlights of the tax related measures and policies mentioned above and share our observations.