China Provinces Extend Social Insurance Break for Small Business

The provinces of Guangxi and Anhui on Thursday became the latest Chinese regions to exempt employers from contributing to employee social insurance through the end of the year.

The relief measure is meant to help regional authorities address the economic impact of the coronavirus pandemic. The policy, announced June 28 by the State Administration of Taxation, builds on business-relief efforts first implemented after the onset of the health crisis earlier in the year.

In Guangxi and Anhui, medium, small and micro-scale companies are exempt from paying three forms of social insurance—basic old-age insurance, unemployment insurance, and work-related injury insurance—through Dec. 31, 2020, authorities said.

Hubei province, where the outbreak originated, announced similar measures on Wednesday. The Beijing region, Henan province, and Fujian province announced their own adoption of the policy this week.

Large companies that benefited from the exemption in the first half of the year are no longer qualified for exemptions unless they demonstrate their operations have been severely impacted by the pandemic, allowing another six-month exemption if they qualify.

Under the latest policy, individual business owners can also delay paying into pension insurance into next year and can apply to delay payment until the end of 2021, if needed.

Check out Bloomberg Tax’s country-by-country roadmaps covering direct and indirect tax developments.