March 1, 2012

China's private non-profit organizations may apply for tax incentives extended to small low-profit enterprises, according to an official of the Taxpayer Service Department of the State Administration of Taxation.

Under the tax laws of China, qualified small low-profit enterprises are eligible for a reduced income tax rate of 20%. Qualified small low-profit enterprises are enterprises that are engaged in industries not restricted or prohibited by the state and that meet the following conditions:

Industrial enterprises: Enterprises that have an annual taxable income not exceeding Rmb300,000, have no more than 100 employees and have total assets worth no more than Rmb30 million.

Other enterprises: Enterprises that have an annual taxable income not exceeding Rmb300,000, have no more than 80 employees, and have total assets worth no more than Rmb10 million.

"The operating income of private non-profit enterprises that qualify as small low-profit enterprises is also eligible for the same tax incentives extended to small low-profit enterprises," said the tax official. On a separate note, under China's deed tax policy for first-time home buyers, if two or more people jointly purchase an apartment with a total area of 90 sqm or less and one or several of the joint owners have already purchased an apartment before, then the joint owners of the apartment will not be eligible for the tax concession extended to first-time home buyers.

The State Administration of Taxation also plans to upgrade the services of its 12366 taxpayer service hotline with a view to forming a unified national hotline system for state and local tax matters.