Notice by Huadu District People’s Government of Guangzhou Municipality on Issuing the Measures of Huadu District for Actively Responding to the COVID-19 Epidemic and Endeavoring to Reduce the Burdens on Enterprises

Hua Fu Gui [2021] No. 2

All towns (street communities), departments of and agencies directly under the district,

TheMeasures of Huadu District for Actively Responding to the COVID-19Epidemic and Endeavoring to Reduce the Burdens on Enterprises are hereby issued to you for your compliance and implementation. Problems encountered in the implementation shall be directly reported to the Development and Reform Bureau of the district.

Huadu District People’s Government of Guangzhou Municipality

22 July 2021

Measures of Huadu District for Actively Responding to theCOVID-19 Epidemic and Endeavoring to Reduce the Burdens on Enterprises

These Measures are formulatedlight of the actual situation of Huadu District, for the purposes of better coordinating epidemic prevention and control with economic and social development, earnestly implementing the Measures of Guangzhou for Actively Responding to the COVID-19 Epidemic and Endeavoring to Reduce the Burdens on Enterprises, practically alleviating the difficulties and burden for enterprises (including individually-owned businesses), especially intensifying the support for the enterprises within the industries hit hard by the epidemic in the district, minimizing the impact of the epidemic, further stimulating the vitality of market players, promoting the stable and healthy development of the economy, and maintaining social harmony and stability

1. Intensifying Financial Support

(1) Interdepartmental information sharing shall be strengthened to list out the enterprises in the industries hit hard by the epidemic, and guide financial institutions in efficiently meeting the financing needs of enterprises and providing them with targeted financing support. The advantages of local financial institutions shall be highlighted to intensify inclusive financial support and improve the efficiency of loan approval and financial services. (Leading unit: Financial Bureau of the district; cooperating units: financial institutions in the district)

(2) Financial institutions shall be supported in adhering to substantial risk judgment, and actively implement the policy of allowing micro and small enterprises to defer principal and interest repayments on inclusive-finance loans, so as to alleviate their financial pressure. The risk compensation mechanism and sub-loan service mechanism of inclusive loans shall be promoted. Small-scale loan companies shall be supported in lowering loan interest rate, reducing handling fees, extending the deadline for repayment and cancelling default interest for the enterprises related to the prevention and control of the epidemic and the enterprises or individuals hit hard by the epidemic under the precondition of keeping risks controllable. (Leading unit: Financial Bureau of Huadu District; cooperating units: financial institutions in the district)

(3) Multi-level meetings of policy interpretation for connection between industries and finance, and the advantages of the financing docking system of Guangzhou Pilot Zone of Reform and Innovation for Green Finance will be fully leveraged, so as to enhance the precision and efficiency of green financial services. (Leading unit: Financial Bureau of Huadu District; cooperating units: all towns (street communities))

(4) The Detailed Implementation Rules of Huadu District for Supporting the Innovative Development of Green Financewill be implemented. For any qualified green credit, a subsidy of up to CNY 1,000,000 will be given to lower the green loan cost of enterprises. (Leading unit: Financial Bureau of Huadu District; cooperating unit: Financial Bureau (State-Owned Assets Supervision and Administration Bureau (SASAB) of Huadu District)

2.Further Cutting Taxes and Fees

(5) The taxpayers and withholding agents affected by the epidemic may apply for further extension of tax declaration according to law. For taxpayers affected by the epidemic that pay taxes regularly in a fixed amount, the taxes payable may be adjusted reasonably or the formalities for a temporary shutdown may be simplified in light of actual conditions. For taxpayers having housing properties and/or land located in a medium- or high-risk area or a lockdown area, or used for an industry hit hard by the epidemic, they may be exempted from housing property tax and urban land use tax from June to July in 2021 if they indeed have difficulty in payment thereof. (Leading unit: Tax Bureau of Huadu District, Guangzhou; cooperating units: Housing and Urban-Rural Development Bureau of Huadu District and Huadu Branch of Guangzhou Municipal Bureau of Planning and Natural Resources)

(6) For small-scale taxpayers, the value-added tax (“VAT”) rate will be lowered from 3% to 1% of the taxable sales income. Those with a total monthly sales of no more than CNY 150,000 (or a quarterly sales of less than CNY 450,000 for taxpayers subject to quarterly payment) shall be exempted from VAT. (Leading unit: Tax Bureau of Huadu District, Guangzhou; cooperating units: Market Regulation Bureau and all towns (street communities) of the district)

(7) The annual taxable income of a small low-profit enterprise that is not more than CNY 1,000,000 shall be included in taxable income at a reduced rate of 12.5%, subject to an applicable corporate income tax (CIT) rate of 20%; the part that is more than CNY 1,000,000, but less than CNY 3,000,000 shall be included in taxable income at an reduced rate of 50%, subject to an applicable CIT rate of 20%. (Leading unit: Tax Bureau of Huadu District, Guangzhou; cooperating units: Market Regulation Bureau and all towns (street communities) of the district)

(8) The annual taxable income of an individually-owned business that is less than CNY 1,000,000 shall enjoy a halved individual income tax (IIT) rate on the basis of the existing preferential policy. (Leading unit: Tax Bureau of Huadu District, Guangzhou; cooperating units: Market Regulation Bureau and all towns (street communities) of the district)

(9) The disabled person’s employment security funds shall continue to be collected at a rate of not higher than the 2017 standard, and graded reduction and temporary exemption shall also be in place during the period until December 31, 2022 (i.e. the 2021 collection period). The collection of cultural undertaking construction fee will be cancelled for the period from January 1 to December 31, 2021. (Leading units Tax Bureau of Huadu District, Guangzhou; cooperating units: Disabled Persons’ Federation and Bureau of Culture, Radio, TV, Tourism and Sports (“BCRTTS”) of the district)

3.Reducing the Social Insurance Premium Payment Burden on Enterprises

(10) According to the uniform requirements of the city, until the end of April 2022, the floating premium rate of unemployment insurance in Huadu district will be lowered from the original 0.6 and 0.8 to 0.4 and 0.6, respectively. From 1 May 2021 to 30 April 2022, the contribution rate of work-related injury insurance will be halved for all employers on the basis of the provincial standard rate and floating rate. The employee medical insurance contributed by employers will continue to adopt a reduced rate of 6.35% (including a maternity insurance rate of 0.85% rate). (Leading unit: Tax Bureau, Bureau of Human Resources and Social Security (“BHRSS”) and Financial Bureau (SASAB) of Huadu District)

4. Reducing the Rent Burden on Enterprises

(11) Rent exemption will be provided for the final lessees who are not state-owned enterprises or administrative institutions and lease the land and/or housing property (excluding residential housing) owned by an enterprise or an administrative institution wholly funded, controlled or actually controlled by the state within the term of a contract that remains in force. More specifically, within the validity term of the lease contract, a 2-month rent exemption shall be granted for leasehold properties located in a medium- or high-risk or a lockdown area, and a 1-month rent exemption shall be granted for those in any other areas. The waived rent will be deemed as profits in the annual business performance assessment and total wage management of a state-owned enterprise. (Leading unit: Financial Bureau (SASAB) of Huadu District)

(12) Collective property companies, non-state-owned enterprises and individual proprietors (“owner”) shall be guided and supported in offering rent exemption or allowing delayed or installment payment thereof to the final lessees of an industry hit hard by the epidemic or in a medium- or high-risk or lockdown area. An owner of good performance may apply for reduction of housing property tax and urban land use tax. (Leading unit: Tax Bureau of Huadu District of Guangzhou Municipality; cooperating units: all towns (street communities))

5. Stabilizing the Employment by Enterprises

(13) Qualified employers that have no or less layoffs may enjoy inclusive policy of refunding unemployment insurance premium. The refund will not exceed 30% of the annual unemployment insurance premium actually paid by both the enterprise and its employees in the case of a large enterprise, and will not exceed 60% thereof in the case of a micro, small or medium-sized enterprise. This provision also applies to social groups, foundations, social service agencies, law offices, accounting firms and private economic organizations that participate in social insurance as an entity. (Leading units: BHRSS , Bureau of Civil Affairs, Bureau of Justice, Financial Bureau (SASAB) and Tax Bureau of Huadu District)

6.Strengthening the Credit Functions of Serving the Real Economy

(14) Financial institutions are encouraged to make innovations in their financing products and services. They should optimize unsecured credit financing products and provide enterprises with comprehensive credit services based on the tax compliance and other information of the enterprises. (Leading unit: Financial Bureau of Huadu District; cooperating units: financial institutions in the district)

(15) Authourities shall give full consideration to the impact of the epidemic and cautiously identify defaulters; guide all types of defaulters in credit repair and carry out credit preaching activities all the year round to assist enterprises in strengthening their credit management awareness and raising their credit rating. (Leading unit: Development and Reform Bureau of Huadu District and the departments in charge of various industries that will work as per their division of responsibilities)

7.Promoting the Recovery of Market Consumption Vitality

(16) Enterprises are encouraged to carry out diversified sales promotion activities to enhance the confidence of consumers and boost consumption in Huadu District. We will make preparations for the activities to be held at Huadu sub-venue of the Second Livestreaming Festival of Guangzhou to leverage new modes, including live commerce, so as to expand consumption and stabilize economic development. The automobile industry shall be encouraged in carrying out sales promotion activities on commercial squares. (Leading unit: Bureau of Science, Technology, Industry, Commerce and IT (“BSTICI”) of Huadu District)

(17) Efforts shall be made to accelerate the establishment of the mechanism for the joint examination and approval of activities and streamline examination and approval procedures of all types of activities, to help recover the consumption vitality of the market. (Leading unit: BSTICI of Huadu District; cooperating unit: Bureau of Justice of Huadu District)

8.Intensifying the Help Given to Accommodation and Catering Enterprises

(18) The Measures of Huadu District for Boosting the Development of the Accommodation and Catering Industry (For Trial) will be further implemented, to motivate accommodation and catering enterprises to actively apply for support funds, advance the materialization of the 2020 policy-based support funds, and intensify assistance to enterprises in responding to the impact of the epidemic. (Leading unit: BSTICI and BCRTTS of Huadu District)

(19) Accommodation and catering enterprises are encouraged to take an active part in the prevention and control of the epidemic. Appropriate reward will be given to the medical observation sites for centralized quarantine in Huadu District that take part in the efforts directly. (Leading unit: BCRTTS of Huadu District)

(20) With approval, in order to ensure their stable employment, the working-hour system of comprehensive calculation or the flexible working-hour system may be implemented for the qualified positions in catering enterprises. Cooperation shall be strengthened with the occupational colleges in the district to build an HR platform between the colleges and the accommodation and catering enterprises. (Leading unit: BHRSS of Huadu District)

(21) Catering enterprises may, according to law, apply for permit for temporary occupation of urban roads in a mature business area or a place or a period of time with less impact on the travel and life of the people. Under the precondition of causing no impact on the safety of running vehicles and pedestrians, they can participate in the operations of food hawkers by using dining cars and pop-up shops to enrich the supply of catering consumption. (Leading unit: Bureau of Comprehensive Law Enforcement for Urban Administration of Huadu District)

9. Driving the Soonest Recovery ofCulture Tourism

(22) More work shall be done to obtain the tourism reward and support funds from the higher authorities and help tourist enterprises to become stronger and better, duly implement the Policy Measures of Huadu District for Accelerating the Development of Culture Tourism, and speed up the materialization of the 2020 tourism support funds;. Tourist enterprises shall be supported in providing services for activities of government offices, enterprises, public institutions and social organizations, such as Party building activities, activities related to Party history education, trade union activities, official affairs, major reception activities, conventions and exhibitions. Travel agency services for arranging transport, lodging, catering and meeting affairs as agents shall be encouraged. The educational department of the district shall be supported in selecting the travel agencies of standardized management and good prestige to arrange the research and study practice activities of students. (Leading unit: BCRTTS of Huadu District)

(23) Assistance will be provided to the entertainment sites of our district in applying to the operators for appropriate reduction or waiver of optical fiber costs during their suspension of business to lighten their burden of the costs. (Leading unit: BSTICI of Huadu District)

10.Organizing Implementation

The related departments of the district should intensify coordination and collaboration, discharge their responsibilities, take the initiative to provide services, strengthen fund support and fulfill the tasks in a meticulous manner toreduce the burden on enterprises.

(24) The Government Service Data Administration of Huadu District should hasten the compilation of a guide to application for preferential measures, open a dedicated service window for materialization of the burden-reducing measures and policies, implement “one-window service”; guide the government service centers of all towns (street communities) in doing a good job of the collection and submission of the application materials of the enterprises within their respective jurisdictions.

In theseMeasures, the “a medium- or high-risk area or a lockdown area” refers to a street community (town) that has been determined as a medium- or high-risk area, or that is or has been under lockdown after 21 May 2021 according to the government notice on epidemic prevention and control; the “industries hit hard by the epidemic” herein refer to the accommodation and catering industry, retail industry, transport industry, cultural, sports and recreational industry, tourist industry, and convention and exhibition industry.

These Measures shall come into force from the date of promugulation, and shall remain in force until 31 December 2021, unless it is otherwise specified herein or in any national, provincial and/or municipal policies.

Form ofDisclosure: Active Disclosure