Support to Enterprises during NCP Prevention & Control
To provide comprehensive support for enterprises in Shanghai to fight the epidemic of Pneumonia caused by Novel Coronavirus 2019 nCoV (referred to as NCP) and to effectively reduce the burden on enterprises, Shanghai Municipality released 28 policies measures which include intensifying fiscal support for enterprises playing key roles in epidemic prevention; temporary lowering and waiving of rentals for enterprises; tax concession for enterprises and individuals that meet relevant criteria; temporary exemption of regular lump-sum tax for individual businesses; temporary cut in medical insurance contribution rate for employers and etc. The details are as follow:
I.Support for enterprises to navigate through this epidemic
i. Intensified fiscal support for enterprises playing key roles in the epidemic prevention.
In accordance with national policies and regulations, for companies producing key supplies for epidemic prevention and control, expenses on new purchase of equipment for capacity expansion can be accounted for as one-off deductible in income tax calculation and full refund will be granted for overpaid VAT. Corporate incomes generated from provision of services that include transportation of key supplies for epidemic prevention and control, public transport, livelihood-related sectors as well as delivery of daily necessity to ordinary citizens will be exempted from VAT levy. Registration fees are waived for NCP prevention-related drugs and medical devices. Civil Aviation Development Fund contribution will be waived for carriers. Losses incurred by governmental requisition on companies producing key prevention supplies will be compensated in full by municipal treasury. For cancellations on signed export orders of key prevention supplies as a result of governmental requisition, subsequent tax burdens shall not be borne by the companies. Enterprises and individuals who demonstrate great courage to assume social responsibility in the prevention and control of the NCP epidemic shall be awarded with honors.
ii. Strengthened special financial and credit support for enterprises playing key roles in the epidemic prevention.
Shanghai branches of development banks, policy banks and large state-owned commercial banks as well as Shanghai-incorporated banks are encouraged to actively employ PBOC’s Special Refinancing Policy by offering concessional loans to enterprises (including SMEs) that produce, transport and sell key prevention supplies and daily necessities. On top of the discounted loan rate, half of the interest on the loan will be subsidized by Shanghai government to make sure that the real interest rate on the loan is lower than 1.6%. Support will be given to financial institutions in Shanghai in issuing financial bonds, specific-purpose bonds as well as others to raise fund for areas related to epidemic prevention and control.
iii. More direct financing channels for enterprises related to epidemic prevention and control
To give a full play of the strength of Shanghai’s financial markets, the city will optimize its services for companies related to the NCP epidemic prevention and control by supporting the companies’ listing, refinancing, M&A, bond issuance as well as asset securitization effort. High-tech companies in the field of NCP epidemic prevention and control are encouraged to be listed at the Sci-Tech Board of Shanghai Stock Exchange. Venture capital funds and equity investment institutions are encouraged to channel funds in the market through to enterprises engaging in the R&D and production of related medical equipment, vaccines and pharmaceuticals.
iv. Highlighted role of insurance as a safety net in the fight against the epidemic.
Given the urgent import needs of institutions for medical supplies as well as epidemic prevention and control supplies, the Shanghai branch of China Export and Credit Insurance Corporation is encouraged to actively engage in import prepayment insurance business and to make timely compensation of legitimate claims filed by customers affected by the epidemic. Insurance institutions are encouraged to offer free casualty insurance and life insurance for Shanghai’s medical workers and disease control professionals who are in Hubei to support the prevention and control work as well as ones who have participated in the city’s combat effort. Insurance institutions are also encouraged to extend the scope of coverage of casualty insurance and illness insurance to the NCP and etc.
v. Support for key enterprises in the supply and marketing of epidemic prevention materials to increase their capacity and import.
After evaluation, government subsidies will be granted to enterprises requisitioned to cover 50%-80% of the total cost of the subsequent technology upgrading. Up to 100% compensation will be offered by the government to cover investment made by requisitioned companies to expand manufacturing capacity of designated categories of products. When the epidemic is over, excesses due to requisition and mandated production, in the event of sales difficulty, shall be underwritten by the government or be procured by the government in accordance with relevant regulations as official reserves. For imported supplies for medical use, in case of sales difficulty with excesses after coordinated allocation, the municipality will take the excessive part into custody, in accordance with relevant regulations, as municipal strategic reserves. For imported supplies of mandated categories and quantities for civil use, in case of sales difficulty with excesses after coordinated allocation, the municipality will take the excessive part into custody, in accordance with relevant regulations, as municipal strategic commodity reserves.
vi. Preferential tax arrangements for imported supplies for epidemic prevention.
In accordance with national policy, supplies imported as donations to epidemic prevention and control shall be exempted from import duties and import-linked value-added tax and consumption tax. Supplies that are imported for direct use in epidemic prevention and control, as mandated by municipal health authorities, shall be exempted from import duties and refund will be granted for previous levies.
vii. Green access for rapid customs clearance of imports for epidemic prevention.
Special windows and green accesses will be opened to process the import of supplies for epidemic prevention, with round-the-clock service guaranteed at major import ports. Two-step declaration, early declaration and other operations are adopted. Priority will be given to imported supplies that warrant examination at inspection check points, ensuring timely and rapid inspection. For duty-free imports of epidemic prevention, release can be granted after basic filing and relevant proofs can be submitted later.
viii. Support for effort overcoming the obstacles in the R&D and production of innovative products for epidemic prevention and control
A special project dedicated to the R&D and production of innovations in NCP diagnosis and treatment will be organized at the municipal level to promote rapid development of capacity and application of innovative products for the epidemic prevention and control, with funding coming from the Earmarked Fund for Strategic Emerging Industries, the Earmarked Fund for Industrial Transformation and Upgrading as well as the Earmarked Fund for Scientific and Technological Innovation Program.