China’s Ministry of Finance and State Taxation Administration has issued new tax measures concerning the coronavirus disease 2019 (COVID-19).
The guidance, Announcement No. 9 (known in English as: Announcement on tax policies on donations to support the prevention and control of the COVID-19) and Announcement No. 10 (known in English as Announcement on individual income tax policy to support the prevention and control of COVID-19), was issued in early February 2020 to guide the individual income tax treatment for donations made and allowances paid during the outbreak. These announcements are effective retroactively from 1 January 2020.
Announcement No. 9 and Announcement No. 10 provide the following tax relief measures:
The guidance on the tax treatment of subsidies and donations provided for the prevention and control of COVID-19 aims at assisting companies and individuals in addressing difficulties experienced during the outbreak. At this point, the income tax treatment of cash allowances paid to employees during the COVID-19 epidemic is unclear.
For more information, contact a KPMG tax professional:
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