The State Taxation Administration ("STA") has recently issued the latest edition of the Guidelines for Preferential Tax and Fee Policies in Response to Novel Coronavirus Pneumonia (COVID-19) Epidemic (the "Guidelines").The latest edition of the Guidelines gives a detailed account of 17 policies one by one in respect of prevention and treatment, support for medical materials supply, advocacy of public interest donations, and support for resumption of work and production.

1. Exempting temporary subsidies and bonuses for engagement in epidemic prevention and control that are offered and distributed at the rate specified by the government from individual income tax;
2. The physical materials (excluding cash) including drugs, medical supplies and protective equipment provided by an entity to individuals for the prevention of the pneumonia outbreak caused by novel coronavirus shall not be counted into individuals' income from wages and salaries and shall be exempt from individual income tax.
3. Refunding all incremental tax credits of VAT to key enterprises manufacturing supplies indispensable for epidemic prevention and control;
4. The income obtained by taxpayers from transportation of key supplies indispensable for prevention and control of the pneumonia outbreak will be exempt from VAT.
5. The income obtained by taxpayers from the provision of public transportation services and daily life services and from the provision of express delivery services for daily necessities of residents will be exempt from VAT.
6. The costs of relevant equipment newly purchased for capacity expansion by enterprises that manufacture key supplies indispensable for prevention and control of the pneumonia outbreak could be counted, on a lump-sum basis, into the costs and expenses for the current period and are deductible before the calculation of enterprise income tax.
7. Supplies that are imported as organized by health authorities for direct consumption in preventing and controlling the outbreak shall be exempted from import tariffs.
8. The cash and articles donated by public welfare social organizations or the people's governments at or above the county level and their departments to deal with the epidemic are allowed to be deducted in full before the enterprise income tax or individual income tax;
9. Expenditures on articles directly donated by enterprises and individuals to the hospitals responsible for the epidemic prevention and control in response to the pneumonia outbreak caused by novel coronavirus shall be fully deducted during the calculation of the amount of taxable income.
10. Goods that are donated on a gratuitous basis shall be exempt from value-added tax, consumption tax, urban maintenance and construction tax, education surcharge, and local education surcharge.
11. The scope of imported supplies exempted from taxes are expanded;
12. Allowing enterprises doing business in those industries seriously hit by the epidemic to carry forward the losses incurred by them in 2020 to future eight years at longest;
13. Reduction and exemption of VAT for small-scale taxpayers phase by phase;
14. Reduction and exemption of the payment of pension, unemployment insurance and work-related injury insurance paid by the enterprise phase by phase;
15. Reduction and exemption of pension, unemployment insurance and work injury insurance for individual business phase by phase;
16. Reduction and exemption of medical insurance paid by the enterprise for employees phase by phase;
17. Encourage to support lessors to reduce or exempt rents for individual industrial business by reducing or exempting urban land use tax and other means;

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