Micro and small-sized companies will enjoy a tax reduction policy automatically without applying for approval from tax authorities, the State Administration of Taxation said in a statement published Saturday on its website.

According to the Ministry of Finance, firms with an annual taxable income of less than 100,000 yuan ($16,100) can enjoy a 50 percent reduction of their annual taxable incomes and a tax rate of 20 percent. The policy will be effective from January 1, 2014 to December 31, 2016, the ministry said on April 8.

Currently the corporate income tax rate for other firms on the Chinese mainland is 25 percent.