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Tax Insights

2018-06-30
4795 | 42 | 5

Research and Development super deduction and High and New Technology Enterprise

The Chinese government is nowadays implementing various regulations to promote and develop the technology businesses in China, especially industries like Information Technology (IT), Ecommerce, Bio-pharmaceutics，Environment Protection, Artificial Intelligence and so on.  Some of incentives given are for R&D companies, High and New Technology Enterprise (HNTE), Advanced Technology Services Enterprise (ATSE), Software companies, Cartoon & Comic companies and so on. Below we discuss about the basic requirements for applying for the R&D super deduction and the HNTE schemes.

 

Preliminary criteria check for R&D super deduction and HNTE

- Does your company’s business scope comprise of Technology R&D, Technology consulting, Technology service or Technology import and export?

- Does your company have its own R&D department or centre?

- Does your company hold any 6 Intellectual Property (IP) or any 1 production patent?

 

Other criteria and information

 

Incentive

R&D super deduction

HNTE

Benefit

Additional 50% R&D deduction (75% for small sized enterprises)

Tax at 15%, instead of 25%,

with additional subsidies

Requirement

- Auxiliary accounts for R&D expenses shall be established


- Relevant project documents shall be provided (for e.g., project execution plan etc.)

- Make a required % of R&D expenses

and earn a minimum % of total revenue

from high and new technology products

and services


- Engage the right % of qualified employees

in R&D work


- Possess the right amount of IP

Application

deadline

End of April

From April to October

(Please note that the application time

might vary between different cities)

Tax inspection

20% of qualified companies will be randomly selected to undergo an inspection every year

Filing is required every 2 years

 

For more details on the above eligibility and application, please feel free to contact us.


Regards,









Julien Li

-

Assistant  Project Director

julien@rtfcpa.com

Nancy Wang

-

ProjectDirector

nancy.wang@rtfcpa.com

<   R&D Expense Super Deductio >  Summary of the 2015 Financial
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