ANNOUNCEMENT 02 Nov 2017

November 2nd, 2017 - A scheme that offered tax breaks to 'advanced technology service enterprises' was extended to be applicable nationwide.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

PRC State Administration of Taxation, November 2nd 2017. (财税〔2017〕79号 关于将技术先进型服务企业所得税政策推广至全国实施的通知)
http://www.chinatax.gov.cn/n810341/n810755/c2908867/content.html

Inception date: 01 Jan 2017 | Removal date: 31 Dec 2017

Tax or social insurance relief

On the 2nd of November 2017, the Chinese Ministry of Finance announced in Caishui 2017/79, that a scheme, originally started in 2009, which granted certain tax cuts to 'advanced technology service' enterprises would be implemented nationwide (see related state acts for information on previous announcements).

The scheme confers a 10% reduction in corporate income tax (from 25 to 15%), and the ability to tax deduct employee education expenses up to a limit of 8% (usually 2.5%).

To be eligible for the scheme, firms must:

  • Obtain more than 50% of its annual income derive from the technically advanced service;
  • Obtain not less than 35% of its annual income from offshore service outsourcing;
  • Have at least 50% college-educated staff.

The scheme mentioned in this announcement differs from another, very similar, scheme for ATSEs started in November 2016. Both schemes were unified in 2018.

This scheme cites an announcement from the State Council earlier in 2017, Guofa 2017/39, as its impetus. Please see related act for more information on this parent policy.

Finally, the scheme is only open to firms native to mainland China.

 

AFFECTED PRODUCTS

 
N/A