The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") have recently issued the Announcement on Tax Policies in Support of Prevention and Control of the Pneumonia Outbreak Caused by Novel Coronavirus (the "Announcement"), the Announcement on the Tax Policy for Donations in Support of Prevention and Control of the Pneumonia Outbreak Caused by Novel Coronavirus and the Announcement on the Individual Income Tax Policy for Prevention and Control of the Pneumonia Outbreak Caused by Novel Coronavirus, all of which shall retrospectively take effect from January 1, 2020 till the date to be announced separately depending on developments in the epidemic situation.

The Announcement reads that: 1. 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. 2. Enterprises that manufacture key supplies indispensable for prevention and control of the pneumonia outbreak may file applications with the competent tax authorities, on a monthly basis, for a refund of all incremental tax credits of value-added tax (VAT). 3. The income obtained by taxpayers from transportation of key supplies indispensable for prevention and control of the pneumonia outbreak will be exempt from VAT. 4. The losses incurred in 2020 by enterprises engaged in those industries getting into difficulty as a result of the epidemic may be carried forward for a period of up to eight years, instead of the previous five years. 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.

(Source: Ministry of Finance)