Policy Contents

For eligible small and medium-sized enterprise (SME) financing (credit) guarantee agencies, the following reserve funds can be deducted before calculating the enterprise income tax:

1. The reserve for guarantee compensation, which is calculated at a rate not exceeding 1% of the year-end guarantee liability balance, is allowed to be deducted before enterprise income tax. Additionally, the remaining balance of the reserve for guarantee compensation from the previous year can be converted into current income.
2. The reserve for outstanding liability, which is calculated at a rate not exceeding 50% of the annual guarantee fee income, is allowed to be deducted before enterprise income tax. Similarly, the remaining balance of the reserve for outstanding liability from the previous year can be converted into current income.

Application Subjects

Small and medium-sized enterprise (SME) financing (credit) guarantee agencies that meet the specified conditions.

Application Condition

To be eligible for the policy, SME financing (credit) guarantee agencies must simultaneously meet the following criteria:

1. Comply with the relevant provisions of the "Interim Measures for the Administration of Financing Guarantee Companies" (Order of the CBRC and other seven ministries No. 3 of 2010) and possess the operating license issued by the regulatory department for financing guarantee institutions.
2. Mainly serve small and medium-sized enterprises, with credit guarantee business and reinsurance business for SMEs accounting for more than 70% of the total credit guarantee business (excluding revenue from credit rating, consulting, training, etc.) in the current year.
3. The average annual guarantee fee rate for SME financing guarantee business does not exceed 50% of the benchmark interest rate for bank loans during the same period.
4. Other conditions stipulated by the financial and tax authorities.

Policy Basis

1. "Notice of the Ministry of Finance and the State Administration of Taxation on the Policy of Pre-tax Deduction of Reserve Funds for Small and Medium-sized Enterprise Financing (Credit) Guarantee Agencies" (Cai Shui [2017] No. 22).
2. "Announcement of the Ministry of Finance and the State Taxation Administration on Extending the Implementation Period of Some Tax Preferential Policies" (No. 6 of 2021), Article 4.