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COVID-19 China Business Tax Exemptions: Beijing, Shanghai, Shenzhen and Guangdong

The COVID-19 outbreak has effected many individuals and businesses across the world. China, the epicenter of the outbreak, is leading the way regarding recovery, after the virus. After nearly 2 months of lockdown, China is returning to normal. The government of the PRC has implemented the following measures to assist businesses and individuals, to recover from any losses and setbacks caused by the COVID-19 pandemic.

The regulations and measures differ in each jurisdiction.

Beijing coronavirus relief measures

Social Insurance

Large businesses:
From February 2020 to April 2020
Payments to the 3 social insurances (basic pension, unemployment insurance and work-related injury) will be reduced by 50% for large enterprises, private non-enterprise units and social organizations.
 
Small and medium sized businesses
From February 2020 to June 2020
All payments from micro (individual, industrial or commercial households) and medium sized enterprises, to the 3 social insurances (basic pension, unemployment insurance and work-related injury) will also be reduced by 50%.
 
All enterprises that meet the above stated requirements do not need to submit an application.
 

Medical Insurance

For all size businesses and units
From February 2020 to June 2020
The payment of basic medical insurance will be reduced from 10% to 5.4%.
Childbirth insurance will now also form part of medical insurance which will be reduced from 0.8% to 0%.
During the period of reduction, the insured person’s benefits will not be affected.

Contribution

Pension:
8%
Unemployment insurance:
0.40%
Work-related injury:
0.20%
Medical insurance (incl. birth and basic medical):
5.40%
Total contribution from the enterprise:
14%

Shanghai coronavirus relief measures

Social Insurance

Large businesses:
From February 2020 to June 2020
Payments from the 3 social insurances (basic pension, unemployment insurance and work-related injury) will be exempted for large enterprises (incl. private non-enterprise units and social organizations) as well as small (individual, industrial or commercial households) and medium sized businesses.  
 
Small and medium sized businesses
From February 2020 to June 2020
All payments from micro (individual, industrial or commercial households) and medium sized enterprises to the 3 social insurances (basic pension, unemployment insurance and work-related injury) will be exempted.

Medical Insurance

For all size businesses and units
From February 2020 to June 2020
The payment of basic medical insurance by an enterprise, will be adjusted to 5.25%. During the period of reduction, the insured person’s benefits will not be affected. Childbirth insurance will no longer form part of social insurance, it will instead fall under medical insurance.

Contribution

Pension:                                                            
0%
Unemployment insurance:
0%
Work-injury:                                                      
0%
Medical (incl. birth and basic medical):  
5.25%
Total contribution from the enterprise:  
5.25%

Shenzhen coronavirus relief measures

Social Insurance

Large businesses:
From February 2020 to April 2020
Payments made by enterprises to the 3 social insurances (basic pension, work-related injury and unemployment insurance) will be reduced by half for large enterprises, private non-enterprise units and social organizations (excluding government institutions).
 
Small and medium sized businesses
From February 2020 to June 2020
Payments made from micro and medium sized enterprises to the 3 social insurances will be exempt for this period.

Medical Insurance

For all size businesses and units
From February 2020 to June 2020
The payments of basic medical insurance which is to be paid by an enterprise shall be reduced from 5.2% to 3%.
 
The contribution for childbirth insurance will now be a part of medical insurance and it remains the same at 0.45%.

Contribution

Pension:                                                            
0%
Unemployment insurance:                             
0%
Work-injury:                                                     
0%
Medical:
Basic medical                                            
3%
Birth                                                      
0.45%
Total contribution from the enterprise: 
3.45%

Guangdong (excl. Shenzhen) relief measures

Social security
Large businesses:
From February 2020 to April 2020
Payments to the 3 social insurances, namely unemployment insurance work-related injury and basic pension, will be reduced by half for large enterprises, private non-enterprise units and social organizations.  
 
Small and medium sized businesses
From February 2020 to June 2020
All payments from micro (individual, industrial or commercial households) and medium sized enterprises to the 3 social insurances (basic pension, unemployment insurance and work-related injury) will be exempted.

Medical Insurance

For all size businesses and units
From February 2020 to June 2020
The basic medical insurance payment by enterprises will be reduced, for this period, from 5.5% to 3.5%.
The contribution for childbirth insurance remains the same at 0.85%, however it will now fall under medical insurance.
The supplementary medical insurance payment will remain the same, which is currently set at 24.23 RMB per month.

Contribution

Pension:                                                              
0%
Unemployment insurance:                              
0%
Work-injury:                                                     
0%
Medical:
Basic medical                                         
3.5%
Birth                                                      
0.85%
Total contribution from the enterprise:  4.35%

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DATE April 22, 2020
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