The Ministry of Finance and the State Administration of Taxation (SAT) have recently issued an announcement to exempt from personal income tax the temporary work subsidies and bonuses obtained by medical personnel and epidemic prevention workers participating in the prevention and control of epidemics in accordance with the standards stipulated by the government; medicines, medical supplies, and protective supplies in kind (excluding cash) issued by units to individuals for the prevention and control of pneumonia infected by the new coronavirus are not counted as wages and salaries and are exempt from personal income tax. They are exempted from personal income tax.
In order to support the development of the relevant enterprises, the epidemic prevention and control of key protection materials production enterprises for the expansion of production capacity of the newly purchased equipment, allowed a one-time cost of the current period of costs and expenses deducted before the enterprise income tax. For more details, please see ↓
Announcement on the Personal Income Tax Policies Related to Supporting the Prevention and Control of the Pneumonia Epidemic Infected by a New Coronavirus
(Summary)
I. Medical personnel and epidemic prevention workers participating in the prevention and control of epidemics are exempted from temporary work subsidies and bonuses according to the standards set by the government. Temporary work grants and bonuses are exempt from individual income tax. The government-specified standards include the standards of subsidies and bonuses set by governments at all levels.
The temporary work subsidies and bonuses for personnel involved in epidemic prevention and control stipulated by the people's governments at the provincial level and above shall be implemented mutatis mutandis.
Two, units issued to individuals for the prevention of new coronavirus-infected pneumonia medicines, medical supplies and protective gear and other in-kind (excluding cash), is not counted as wages and salary income, exempt from personal income tax.
Third, this announcement shall come into force on January 1, 2020, and the deadline shall be announced separately depending on the situation of the epidemic.
Announcement on Relevant Tax Policies for Supporting the Prevention and Control of the Pneumonia Epidemic Infected by New Coronaviruses
(Abstract)
Allow a one-time inclusion of relevant equipment newly purchased by the production enterprises of the key protection materials for the prevention and control of the epidemic for the purpose of expanding the production capacity to be included in the current period. Costs and expenses in the enterprise income tax deduction before tax.
Two, the enterprises producing key protection materials for epidemic prevention and control can apply to the competent tax authorities for a full refund of the incremental VAT tax credit on a monthly basis.
The incremental tax credit referred to in this announcement refers to the newly increased tax credit at the end of the period compared with the end of December 2019.
The list of enterprises producing key protection materials for epidemic prevention and control referred to in the first and second paragraphs of this announcement shall be determined by the development and reform departments and industry and information technology departments at the provincial level and above.
Third, the income obtained by taxpayers from the transportation of key protection materials for epidemic prevention and control shall be exempted from value-added tax (VAT).
The specific scope of key protection materials for epidemic prevention and control shall be determined by the National Development and Reform Commission and the Ministry of Industry and Information Technology.
Fourth, for losses incurred in 2020 by enterprises in difficult industries that are greatly affected by the epidemic, the maximum carry-forward period will be extended from five years to eight years.
Difficult industry enterprises, including transportation, catering, accommodation, tourism (refers to travel agencies and related services, excursion scenic area management two categories) four categories, the specific judgment standards in accordance with the current "National Economic Industry Classification". The main business income of enterprises in difficult industries for the year 2020 must account for more than 50% of the total income (excluding non-taxable income and investment income).
V. Taxpayers are exempted from VAT on income derived from the provision of public ****transportation services, living services, and the provision of express delivery and collection services of essential living materials for residents.
The specific scope of public **** transportation services shall be implemented in accordance with the Provisions on Matters Related to the Pilot Business Tax to Value-Added Tax (issued by Cai Shui [2016] No. 36).
The specific scope of living services and courier collection and delivery services shall be implemented in accordance with the Notes on Sales of Services, Intangible Assets and Real Estate (issued by Cai Shui [2016] No. 36).
Sixth, this announcement shall be implemented from January 1, 2020, and the deadline shall be announced separately depending on the epidemic.