Legal analysis: According to relevant laws, Shanghai's preferential tax policies for small and micro enterprises include: i. increasing tax and fee reductions; ii. lowering the cost of production and operation of enterprises; iii. exploring domestic and international markets; iv. upgrading the specialization of small and medium-sized enterprises (SMEs); v. strengthening financing services for SMEs; and vi. optimizing services for SMEs. Specifically for each tax type, the policies are as follows: i. Value-added tax (VAT): small-scale VAT taxpayers with monthly sales of less than 100,000 yuan (taxed on a quarterly basis, with quarterly sales not exceeding 300,000 yuan) are exempted from VAT. II. Enterprise Income Tax: For small micro-profit enterprises, the portion of annual taxable income not exceeding 1 million yuan is reduced by 25% of the taxable income and the enterprise income tax is paid at a rate of 20%; for the portion of annual taxable income exceeding 1 million yuan but not exceeding 3 million yuan, the portion of annual taxable income is reduced by 50% of the taxable income and the enterprise income tax is paid at a rate of 20%.

Legal basis: "Shanghai Small and Micro Enterprises Tax Preferential Policies" Article 1 Increase tax and fee reductions Fully implement the national tax reduction policy. Reduction of value-added tax (VAT) for small-scale taxpayers, exemption of VAT for public **** transportation, catering and lodging, tourism and entertainment, culture and sports and other services will be extended until the end of 2020. Income tax for small micro-profit enterprises can be deferred until the first filing period in 2021 and paid together. Fully implement the national fee reduction policy. The policy of exempting micro, small and medium-sized enterprises (MSMEs) and individual industrial and commercial households insured on a unit basis from unit contributions for pension, unemployment and industrial injury insurance was extended until the end of 2020. The policy of voluntary deferment of basic pension insurance premiums for 2020 was introduced for individual industrial and commercial households and various types of flexibly employed persons insured in their personal capacity. The policy of exempting port construction fees for import and export goods and halving the levy on the fund for compensation for oil pollution damage of ships was extended until the end of 2020. Increasing local tax and fee reductions. Continue to implement the relevant provisions of the city's policy on relevant taxes and fees within the local competence to the lowest level within the range stipulated by the state.