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Small Low-profit Enterprises to Pay Advance Income Tax Every Quarter

The State Administration of Taxation (SAT) issued a circular lately announcing that starting from 1 April, value-added tax (VAT) small-scale taxpayers and small low-profit enterprises may file VAT returns or pay advance enterprise income tax every quarter instead of doing so every month. This move is set to further lighten taxpayers’ burden of handling tax matters.

According to a person in charge of SAT’s tax collection service department, the crowdedness and long queuing time at its tax service halls have always been an issue of concern to taxpayers. Cutting down on the frequency of filing tax returns and making tax payments by small low-profit enterprises means reducing the number of times taxpayers are required to go to tax departments to handle such procedures. This not only helps lighten taxpayers’ burden of handling tax matters, but also eases the problem of crowdedness at the tax service halls.

According to the interim regulations on VAT and interim regulations on consumption tax as well as their implementing rules, VAT and consumption tax are to be paid every month or every quarter, with the supervisory tax department responsible for determining the payment due date. In order to meet the different needs of small-scale taxpayers, the circular stipulates that taxpayers will be able to choose whether or not to file tax returns every quarter. Should the taxpayer opt not to file tax returns every quarter, the supervisory tax department will determine the tax payment due date in accordance with the amount of tax payable.

The circular also sets out that nil returns for urban maintenance and construction tax and education surcharge complementary to VAT and consumption tax will be waived. As information sharing between state tax bureaus and local tax bureaus continues to strengthen, information on nil returns of complementary taxes and surcharges on VAT and consumption tax can now be generated automatically. Hence, taxpayers will no longer be required to file nil returns.

Content provided by Picture: HKTDC Research
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