The Shanghai government unveiled a series of relief policies on February 8, including tax breaks and low-interest loans, in a bid to stabilize business and to encourage corporates to fight against the coronavirus outbreak. These policies will give companies additional supports on top of the previous relief policies launched by the central government.
The 28 relief policies are divided into the 6 categories. We summarized the important clauses for our readers as the following.
Incentives to encourage corporates to participate in the fight against the virus
Any income from delivering supplies and providing public transportation in the epidemic will be exempted from value-added tax.
Local commercial banks are urged to leverage central bank policy to offer loans with preferential rates to companies that make, transport or sell medical supplies and daily necessities in the fight against the epidemic, including small and micro firms.
Policyholders who are hurt by the epidemic should be offered compensation as early as possible. Insurers are encouraged to offer insurance for free to medical staff who participate in emergency response in Hubei, and to expand insurance coverage to include the novel coronavirus.
The imports of supplies for epidemic control will be exempted from tariffs and other related VAT or consumption tax.
The city will set up new or leverage existing industry and innovation funds to support development and manufacture of new products to fight against the coronavirus.
Reducing rental, tax, fee burden on corporates
State property owners are required to waive rentals at least in February and March for small- and medium-sized enterprises. Commercial property owners are encouraged to waive or reduce rentals for tenants, and they can accordingly apply to get deductions in their own property tax or land use tax.
For reasons related to the impact of the epidemic, tax payers can apply to delay tax declaration for up to 3 months.
For donation in terms of supplies and cash by corporates, it can enjoy pre-tax deduction, with no need to pay VAT, consumption tax or additional tax. For subsidies offered to medical staff or protective supplies offered to employees, no personal income will be levied.
Financial support to companies heavily impacted by the virus
For industries or SMEs that are heavily impacted by the epidemic, local banks are required to offer loans with interest rates at least 25 basis points lower than the benchmark.
Banks should offer refinancing or extend maturity periods for loans used as working capital in a variety of industries that are heavily hit by the epidemic, including tourism, accommodation and catering, wholesale and retail, transportation, logistics and warehousing, culture and entertainment, convention and exhibition.
More efforts to stabilize employment
The city will delay the starting month of the annual collection period of social insurance premiums from April to July, or by 3 months, due to the novel coronavirus outbreak.
For enterprises that arrange online training for employees under the impact of the epidemic, subsidies equivalent to up to 95% of the actual training expenditure can be offered back.
Enterprises are encouraged to adopt flexible working policies, such as salary adjustment, job rotation, flexible working hours, and other measures to stabilize job positions.
Measures to help resumption of work
The government will urge and help enterprises to put in place epidemic prevention measures. Efforts will be made to ensure supply of masks, thermometers, and disinfectants.
The government will help companies to leverage WeChat, and other interactive online channels to hold online recruitment activities to secure sufficient labor force.
The city will step up efforts to develop a series of new business ecosystems, such as online shopping, online education, remote office, online services, digital entertainment, digital life, and intelligent delivery.
Fostering a business-friendly environment
For companies that may incur payment default or other activities that may hurt their credibility due to the epidemic, such issues should not be recorded as misbehavior in the public credit rating system.
For enterprises unable to fulfill international trade contracts due to the epidemic, the Council for the Promotion of International Trade Shanghai is expected to issue a factual proof of force majeure upon request.
The city will establish an emergency public legal service mechanism, and help enterprises deal with disputes over contracts and labor relations that arise from the epidemic.