The State Administration of Taxation ("SAT") has recently issued the Circular on Implementing Several Measures to Further Support and Serve the Development of the Private Sector (the "Circular").
The Circular outlines 26 concrete measures in five respects, including "earnestly carrying out and improving policies to promote lower tax burden on private businesses". The Circular calls for efforts to carry out preferential tax policies without reservation, and requires tax authorities to firmly follow the principle of arranging for taxation according to law, resolutely prevent excessive taxation, and unwaveringly implement policies on tax reliefs. Private enterprises that meet conditions for the entitlement to preferential tax policies, and other taxpayers, will be treated equally. In addition, the Circular clearly states that, methods to make social insurance contributions shall be stabilized, adding that the SAT shall actively cooperate with relevant departments in doing research into proposals for cuts in social insurance contribution rates, and ensure the overall burden on enterprises will not be increased and the actual social insurance contribution burden borne by enterprises will be relieved substantially. Furthermore, the Circular proposes to allow private businesses stuck in business troubles to defer tax payments.