Airlines will be exempted from payment to the civil aviation development fund; necessary compensation is to be granted to airlines carrying out major transport missions; financial support is to be given to airlines that continue their operation on international routes during the COVID-19 outbreak. These are among the package of policies on tax reduction or exemption and subsidies for epidemic prevention and control recently introduced by CAAC in coordination with the Ministry of Finance and other relevant agencies as it strives to balance the COVID-19 prevention and control efforts and the economic and social development, with a view to aid civil aviation enterprises in addressing operational risks amid the COVID-19 outbreak.

As approved by the State Council, a series of preferential fiscal, taxation and financial policies specific to civil aviation enterprises have been adopted. Starting from January 1, airlines will be exempted from payment to the civil aviation development fund, which will reduce the burden on enterprises by about 600 million yuan per month; necessary compensation will be granted to airlines carrying out major transport missions to support aviation companies in fighting the outbreak; airlines are incentivized to operate on international routes by providing financial support for the operation of international flights during the COVID-19 outbreak in order to ensure China’s normal exchanges with foreign countries.

In addition, revenues generating from transporting key anti-epidemic materials and providing public transport, livelihood services and express delivery will be exempted from value-added tax; the maximum carry-over period of losses incurred in 2020 will be extended from 5 years to 8 years for businesses in difficulty that are hit hardest by the outbreak; temporary subsidies for medical personnel and epidemic prevention workers will be exempted from personal income tax. Meanwhile, support will be given to banks to provide loans with preferential interest rate and financial discounts to key enterprises engaged in the production, transportation and sale of key medical materials and daily necessities, and full financial subsidies will be granted to airlines that refit safety electronic devices on transport aircraft.

It is reported that since the COVID-19 outbreak, civil aviation enterprises have suffered a tremendous impact in their operation with their economic benefits declining sharply. In face of this challenging situation, CAAC has firmly implemented the important instructions by President Xi Jinping on the epidemic prevention and control and the decisions and deployments of the CPC Central Committee and the State Council. While coordinating and organizing civil aviation enterprises to engage in epidemic prevention and control, CAAC has also endeavored to carry out an in-depth analysis of the impact of the epidemic on the operation and profits of the civil aviation industry, hear from major enterprises including airlines engaged in the prevention and control of COVID-19 about their difficulties and demands concerning policy, enhance coordination and communication with authorities of finance and taxation including the Ministry of Finance to actively seek financial policy support and make good use of the policy toolbox, and offer further fees reductions in the industry to help enterprises tide over the difficulties.