context: MoF promised more tax cuts in 2019 to counter economic slowdown effect. Key social groups and veterans are important not only because they are vulnerable, but they have strong mobilisation capacity that could de-stabilise the society.

Ministry of Finance released three documents on tax policies for aged care agencies, veterans and employment of key social groups.

‘Notice on specifying aged care agencies VAT exemption’ stipulates

  • aged care agencies specified in ‘Transitional regulations for changing from business tax to VAT’ (财税〔2016〕36 号) and other legally registered collective residency and care service providers are eligible for VAT exemption
  • from 1 Feb 2019 to 31 Dec 2020
    • medical institutions providing services at prices no higher than the local benchmark price will qualify for VAT exemption
    • no interest-bearing loans within enterprise conglomerates are exempt from VAT
  • return-of-premium life insurance products for over one-year are eligible for VAT exemption

‘Notice on tax policies supporting veteran employment and startups’ stipulates

  • veteran’s independent businesses are eligible for up to 12,000 annual rebate in VAT, urban maintenance fee, education contributions and personal income tax for three years, with a possible increase of 20 percent
  • enterprises hiring veterans and using employment contracts of one year or more qualify for 6,000 per employee annual rebate in VAT, urban maintenance fee, education contributions and personal income tax for three years, with a possible increase of 50 percent
  • effective 1 Jan 2019 to 31 Dec 2021

‘Notice on tax policies supporting key social group employment and startups’ stipulates

  • key social groups include
    • registered impoverished populations
    • those unemployed for more than half a year
    • urban residents living on minimum life guarantees
    • college graduates
  • independent businesses of key social groups are eligible for up to 12,000 annual rebate in VAT, urban maintenance fee, education contributions and personal income tax for three years, with a possible increase of 20 percent
  • enterprises hiring key social groups and using employment contracts of one year or more qualify for 6,000 per employee annual rebate in VAT, urban maintenance fee, education contributions and personal income tax for three years, with a possible increase of 30 percent
  • effective 1 Jan 2019 to 31 Dec 2021