In April 2021, the State Administration of Taxation released the Announcement on the Implementation of Matters Related to Supporting the Development of Preferential Income Tax Policies for Small and Low-profit Enterprises and Individual Industrial and Commercial Households (2021 No.8). The announcement furtherly implements the policy of halve the taxable income not exceeding 1 million for small low-profit enterprises and individual industrial and commercial households based on the current preferential policy.

Q:	What is the applicable period and scope of the preferential tax policy?
A:	From January 1, 2021 to December 31, 2022, the taxable income not exceeding 1 million for small low-profit enterprises and individual industrial and commercial households shall be halved based on the current preferential policy. Both small and low-profit enterprises and individual industrial and commercial households can enjoy the halving policy regardless of the method of collection.
Q:	What is procedure for enjoying the preferential policy?
A:	Small low-profit enterprises and individual industrial and commercial households can enjoy the halving policy when prepayment and final settlement of income tax, and there is no need to file for the policy when enjoying the policy except filling out relevant column in the enterprise income tax declaration form or individual income tax declaration form.
Q:	Is there any change in the determination criteria of small and low-profit enterprises?
A:	No, the determination criteria of small and low-profit enterprises are the same as before, which include enterprises engaging in non-restricted or prohibited industries by the nation, and simultaneously fulfill the annual taxable income not exceeding 3 million yuan, number of staff not exceeding 300 and total assets not exceeding 50 million yuan. When prepaying the enterprise income tax, the total assets, number of staff and annual taxable income indicators of the small and low-profit enterprises shall be temporarily determined according to the situation as of the end of tax reporting period of current year.
Q:	What is the calculation method of the actual income tax payable and tax deductions of small and low-profit enterprises?
A:	For  the  taxable income obtained by small and low-profit enterprises  not exceeding 1 million, and more than 1 million yuan but not exceeding 3 million yuan, the corresponding taxable income shall be reduced to 12.5% and 50% respectively and the tax rate shall be 20%.
Q:	How to calculate the tax exemption or relief amount for individual industrial and commercial households?
A:	The tax exemption or relief amount = (tax payable on taxable operating income not exceeding 1 m yuan – tax exemption or relief due to other policies × the part not exceeding 1 m yuan of taxable operating income ÷ taxable operating income ) ×(1-50%)