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Among small and medium-sized enterprises (SMEs), a high percentage of them are small-scale taxpayers. These enterprises generally operate on a small scale, have a lean staff, and most of them do not have a professional tax team, and are often troubled by tax issues in their daily operations - they are not clear about the types of taxes, miss the concessions, and make mistakes in filing, and so on. This article organizes the key points of taxation that small-scale enterprises must pay attention to, to help you avoid risks and reduce costs.

I. What taxes do small-scale enterprises pay?

A clear grasp of quarterly taxes is the foundation of fiscal management. Many business owners focus only on VAT and EIT, and are prone to omit other taxes and fees, leading to omissions and misstatements. Specifically:

Value-added tax (VAT): the core tax for small-scale enterprises, levied on the sale of goods and the provision of taxable services, using the simple tax method, with a lower tax rate than that of general taxpayers, and with an exclusive tax exemption policy.

Enterprise Income Tax (EIT): Enterprises are required to pay EIT after making a quarterly profit, and small-scale enterprises meeting the criteria of “small and micro-enterprises” are entitled to substantial concessions. It is important to note that even if there is no quarterly profit, zero declaration must be made on time, and the process must not be ignored because there is no taxable amount.

Additional taxes and fees: based on VAT, including urban maintenance and construction tax, education surcharge and local education surcharge:

Urban maintenance and construction tax: 7% (urban area), 5% (county/town), 1% (other areas) tax rates by business location

Education surtax rate 3%, local education surtax rate 2%

⚠️ The additional tax is closely related to VAT and is easy for business owners to miss when filing their VAT returns, so they need to pay special attention to avoid incurring penalties and late payment fees.

II. Value-added tax concessions: exemptions and policy continuity

VAT concessions have a direct impact on the cash flow of a business, and the “tax-free amount” and policy continuity are the key concerns of business owners.

Current exemption amount: Under the current policy, small-scale taxpayers with monthly sales not exceeding 100,000 yuan (quarterly sales not exceeding 300,000 yuan) are exempt from VAT. It should be noted that: the sales amount is excluding tax; if special VAT invoices are issued, even if the total quarterly sales amount does not exceed 300,000 RMB, the corresponding sales amount of the special invoices is still subject to tax.

Policy continuity: The VAT exemption policy is not fixed for a long time, and has been extended after expiration many times before. From the policy orientation, the state supports the development of small and micro enterprises, and the probability is that it will continue to continue, but the specific time and adjustments need to be based on the official documents of the Ministry of Finance and the State Administration of Taxation. It is recommended to obtain the latest news through official channels or professional tax organizations.

Warm tips: VAT exemption is 300,000 per quarter, but the special invoice part is not exempted. Want to know how to reasonably control the amount of invoicing to enjoy the maximum benefits? Sweep the code to add WeChat jxhcyb, we send you a detailed measurement table!

III. Enterprise income tax incentives: criteria for “small and micro enterprises” and measurement of tax savings

“Income tax incentives for small and micro-enterprises is an important initiative of the state to support the development of small and micro-enterprises, a correct understanding and use of this policy can bring significant tax savings for enterprises.

Four conditions for enjoying the benefits

Businesses need to meet the following criteria as well:

Engaged in non-restricted and prohibited industries in the country

Annual taxable income not exceeding 3 million yuan

No more than 300 practitioners

Total assets not exceeding $50 million

For most small taxpayers, this can usually be met if care is taken to control the relevant indicators.

Stepped tax rate design

The policy adopts the design of “segmented taxation”, which makes the tax burden more reasonable:

Portion of annual taxable income not exceeding 1 million yuan: effective tax liability 5%

Portion exceeding $1 million but not exceeding $3 million: effective tax liability 10%

This design not only takes care of the actual development of small and micro-enterprises, but also provides enterprises with reasonable space for tax planning.

IV. Filing time and precautions

Filing on time and accurately is a basic requirement for business compliance, and some business owners are overdue due to lack of understanding of the time or busyness of their affairs, triggering adverse effects.

Filing times for each tax type:

VAT, surcharges: Quarterly tax period, the filing period is within 15 days after the end of the quarter (e.g., the filing period for January-March is usually April 1-15), and is postponed in case of legal holidays.

Corporate income tax:Quarterly prepayment, with the same filing period as VAT; annual remittance to be completed before May 31 of the following year.

Different regional tax bureaus may fine-tune the filing schedule, so pay attention to local notices.

Consequences of late filing:

Fines & Late Fees:According to the Tax Collection and Administration Law, failure to file a return on time is punishable by a fine of less than 2,000 yuan, and in serious cases by a fine of 2,000 yuan to 10,000 yuan; at the same time, from the date of late payment of taxes, a late fee of five ten-thousandths of one percent will be added every day.

Impact on tax credit rating: Late declaration directly affects the credit rating, and if it is rated as Grade D, it will face the consequences of restricted invoice application, inability to enjoy some preferences, joint disciplinary actions and so on.

Warm reminder: The deadline for quarterly filing is the 15th of the following month, postponed in case of holidays. It is recommended to set a calendar reminder or appoint a professional organization to file on your behalf. Want to get the 2026 annual filing calendar? Scan the code to add WeChat jxhcyb, we send you the Excel version!!

V. How to plan tax management without a professional accountant?

Most small-scale enterprises are not equipped with professional accountants, and business owners keep running accounts on their own, which can lead to problems if they do not meet the tax requirements; and unclear knowledge of cost bills can also lead to overpayment of income tax.

The flow book is standardized and recorded:

Clear content: record the date, amount, purpose, and name of the counterparty unit (or individual) for each receipt and expenditure.

Retention of vouchers: original vouchers (bank records, receipts, invoices, etc.) corresponding to each receipt and expenditure are filed on a time basis.

Distinguish between income and expenditure: Separate business income and expenditure from personal income and expenditure to avoid personal consumption being included in the cost of the enterprise.

Types of cost notes that can be offset against profit:

Purchase invoices: VAT invoices obtained from the purchase of raw materials, commodities, office supplies, etc. (ordinary/special-purpose invoices are available, special-purpose invoices offset VAT, ordinary invoices offset profits)

Expense invoices: rent, utilities, travel expenses (meal tickets are deducted at the lower of 60% and 5 per cent of sales revenue), transportation costs, advertising costs (not exceeding 15% of sales revenue can be deducted, and the excess portion can be carried forward to future years), etc.

Other bills: employee payroll (with bank disbursement records), social security contribution vouchers, stamp duty payment vouchers, etc.

⚠️ The notes need to be genuine, legal and related to the business; false or irrelevant notes not only cannot offset profits, but may also be recognized as theft.Taxes and face penalties.

VI. Policy access: timely access to preferences

The IRS often releases incentives for small taxpayers (e.g., phase-outs, halving of surtax), and the following are reliable ways to obtain them:

Official website of the State and Local Tax Bureaus: weekly browsing of the “Policies and Regulations” and “Tax Service” columns

Official public numbers of tax bureaus: e.g. “State Administration of Taxation”, “XX Provincial Tax Bureau”.”

Tax agency: real-time attention to the policy, timely inform customers

Industry associations: some associations organize financial and tax training or push out information

Warm tips: policy changes are frequent, it is recommended to commission a professional organization to track in real time to avoid missing the dividends. Want to get the latest compilation of tax incentives? Scan the code to add WeChat jxhcyb, we send you a complete list!

We provide domestic (Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, etc.) company registration, overseas (Hong Kong, the United States, Japan, the United Kingdom, Singapore, Thailand, Vietnam, etc.) company registration, Hong Kong identity application and renewal services, as well as covering the cross-border tax planning, shareholding structure design, compliance and risk control programs, and other full chain of corporate services.

Feel free to contact me anytime you need me at:18148556832, microsoft:jxhcyb(can be added by searching directly) or scan the QR code below to add

VII. Professional assistance: agency services to reduce the burden on small-scale enterprises

Small-scale enterprises need professional knowledge and time for tax management, and it is easy for them to deal with problems due to lack of professionalism and increase costs by hiring full-time accountants, so it is more cost-effective to choose professional agency services.

We offer corporate tax audit agency services to provide comprehensive tax support to small and medium-sized enterprises:

Standardized bookkeeping: professional accountants according to the tax requirements of bookkeeping, organizing vouchers, to ensure that the running account compliance

Filing on time: complete all tax returns on behalf of the agency to avoid late filing

Policy Interpretation: Screening for Available Benefits and Assisting with Procedures to Ensure Enterprises Enjoy Dividends

Tax Consultation: Answering tax questions and helping enterprises avoid risks

We will continue to update the practical knowledge of enterprise finance and tax (policy interpretation, bookkeeping skills, reporting guidelines, etc.). If you have any tax questions, contact us at any time, the professional team to provide free one-on-one answers, so that you can focus on business, no tax worries.

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