Research and Development super deduction and High and New Technology Enterprise

R&D and HNTE.jpg

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