Core Viewpoint - The article discusses the tax exemption thresholds for individual businesses in China, highlighting the importance of sales volume in determining tax obligations and the various tax rates applicable based on different sales brackets [1][3]. Group 1: Sales Thresholds and Tax Rates - The critical sales thresholds are set at 1.2 million and 5 million yuan, which serve as key dividing lines for tax obligations [3]. - For annual sales ≤ 1.2 million yuan, businesses can be exempt from value-added tax (VAT) if quarterly sales do not exceed 300,000 yuan [5]. - For annual sales between 1.2 million and 5 million yuan, businesses are required to pay VAT at a reduced rate of 1% instead of the standard 3% [5]. - Businesses with annual sales exceeding 5 million yuan are classified as general taxpayers and are subject to standard VAT rates ranging from 6% to 13% [5]. Group 2: Local Policy Support - Certain regions have implemented local policies to attract businesses, offering tax incentives for small-scale enterprises with inadequate bookkeeping [8]. - For small individual businesses, some regions provide exemptions from personal income tax if monthly sales remain below specified thresholds, effectively resulting in a zero tax burden [8]. - Larger individual businesses with annual revenues up to 4.5 million yuan may face a total tax burden as low as 1.46% when combining personal income tax and VAT [8]. Group 3: Compliance Strategies - Businesses are advised to choose the appropriate tax assessment method based on their annual income, with options for fixed or actual assessment [10]. - It is recommended to control invoicing amounts to avoid exceeding tax exemption limits, potentially by splitting business operations or establishing multiple entities [10]. - Maintaining proper documentation, such as contracts and payment receipts, is essential for proving the legitimacy of business operations [10].