China Ministry of Finance and State Taxation Administration announced that taxpayers in the film industry will be exempt from VAT on income derived from the provision of film screening services. This is to apply retrospectively from January 1, 2020 to December 31, 2020. Losses incurred by film companies can now be carried forward an extended period to eight years from the previous five years, and any taxes and fees already levied for this year can be deducted or refunded in the following months.
Additionally, the Ministry of Finance and China Film Administration have stated that businesses in the film industry are exempt from paying the usual ‘cultural construction fee’. These supportive policies will assist film companies already operating in China that were impacted by COVID-19, as well as new entrants that begin operations before the end of the year.