China’s Ministry of Human Resources and Social Security issued guidance (Announcement No. 7) regarding the administration of Chinese social security contributions during the period of prevention and containment of the spread of the coronavirus (COVID-19). The Standing Committee of the State Council on 18 February 2020 further decided to reduce or waive employer obligations on social security contributions for a specified period of time to ease the burden of enterprises during this difficult time.
The guidance under Announcement No. 7 provides measures for local social security bureaus and allows enterprises to make catch-up employer social security contributions within a period of three months following containment of COVID-19 outbreak without adversely affecting employee rights to social security benefits.
The Standing Committee of the State Council decided to reduce or waive employer contributions to pension, unemployment, and work-related injury insurance schemes for enterprises in Hubei and other provinces and cities. In addition, certain local authorities have introduced policies in accordance with outbreak situation in the respective city/province in order to support local enterprises during the outbreak. These included deferring adjustments to social security contribution base, adjusting employer contribution rate for certain social security plans, extending payment of employer social security contributions, and relaxing the restrictions on applying for refunds of unemployment insurance.
Announcement No. 7 along with the February 2020 decision of the Standing Committee of the State Council on administration of social security contributions emphasize relief measures during the COVID-19 outbreak and to alleviate the burden on enterprises.
For more information, contact a KPMG tax professional:
David Ling | +1 609 874 4381 | firstname.lastname@example.org
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.