China enhances financial support for small businesses

World
Europe

China has unveiled tax break policies to reduce the corporate burden on small and micro-sized businesses and support economic growth.

From December 1, 2017, to December 31, 2019, financial institutions will be exempt from value-added taxes (VAT) on income from interests for loans to small, micro-sized and individually-owned businesses, according to a document jointly released by the Ministry of Finance and State Administration of Taxation.

Currently, the policy only applies to loans for farmers.

The maximum loan to each of the eligible borrowers for tax exemption is one million yuan (150,950 US dollars), the document revealed.

Meanwhile, stamp taxes on loan contracts for small and micro-sized businesses will be exempt from January 1, 2018, to December 31, 2020, according to the document.

The government has been encouraging banks to support small businesses, which often have difficulty obtaining bank loans.

By the end of June, outstanding loans from financial institutions to small and micro-sized businesses reached 22.6 trillion yuan, nearly double the amount at the end of 2012, accounting for 32 percent of total loans to all businesses.

1km

Source(s): Xinhua News Agency