China's Ministry of Finance and State Administration of Taxation have issued Notice 13/2019, which prescribes the additional tax relief for small businesses and changes for the investment incentive in start-ups approved by the State Council on 9 January 2019. The key points are summarized as follows:

• For small-scale businesses with monthly sales up to CNY 100,000, a VAT exemption applies;
• For small low-profit businesses with annual taxable income up to CNY 1 million, only 25% of taxable income will be subject to tax at a reduced tax rate of 20%, and for small businesses with taxable income above CNY 1 million up to CNY 3 million, 50% of taxable income will be subject to tax at a reduced tax rate of 20%;
• Small low-profit businesses are defined as those with annual taxable income not exceeding CNY 3 million, total employees not exceeding 300, and total assets not exceeding CNY 50 million (number of employees and asset value based on quarterly average);
• For small-scale businesses, local governments may provide up to a 50% reduction in local taxes, such as resource tax, urban maintenance and construction tax, land tax, etc., which may be applied in addition to benefits already provided;
• For the 70% deduction incentive for investments in technology start-ups by venture capital enterprises and angel investors, the conditions for qualifying start-up are relaxed, including an increase in the maximum number of employees from 200 to 300, and an increase in the maximum total assets and annual sales from CNY 30 million to CNY 50 million.

Notice 13/2019 applies from 1 January 2019 to 31 December 2021. In relation to the investment incentive, the Notice applies for investments made during that period, as well as investments made in the two years prior to 1 January 2019, provided that the required conditions for the incentive are met.