Catering is not tax-free in 2021.

From March 1 to May 31, 2020, for small-scale taxpayers of VAT in Hubei Province, taxable sales income to which the 3% levy rate applies shall be exempted from VAT; and prepayment of VAT on prepaid VAT items to which the 3% prepayment rate applies shall be suspended.

Small-scale VAT payers in other provinces, autonomous regions and municipalities directly under the Central Government, except for Hubei Province, shall be subject to a reduced VAT levy rate of 1% on taxable sales income applying the 3% levy rate; and shall be subject to a reduced pre-payment of VAT at a reduced pre-payment rate of 1% on pre-paid VAT items applying the 3% pre-payment rate.

Value-added taxpayers in the catering industry are divided into general taxpayers and small-scale taxpayers. The applicable tax rate for general taxpayers of value-added tax in the catering industry to provide catering services is 6%, and the applicable levy rate for small-scale taxpayers of value-added tax in the catering industry to provide catering services is 3%.

Catering enterprises with annual sales of more than 5 million yuan should be registered as general taxpayers. Small-scale enterprises with sound accounting may also apply to the competent tax authorities for registration as general taxpayers.

General taxpayers selling their own used fixed assets that are non-deductible and have no input tax credit as stipulated in Article 10 of the Provisional Regulations of the People's Republic of China on Value-added Tax (VAT) shall be subject to VAT at a reduced rate of 2% in accordance with the simplified method based on a 3% levy rate.

Announcement of the State Administration of Taxation on VAT Policies for Supporting Individual Industrial and Commercial Enterprises in Resuming Work and Businesses