Income tax preferences and qualifications for High- and New-Technology Enterprises (HNTEs) have recently been clarified, filling a key gap in China’s corporate tax regime, which unified its treatment of foreign and domestic enterprises from the beginning of the year under the PRC Enterprise Income Tax Law. Key changes for HNTEs include:
• higher required spending on domestic research and development of technology and intellectual property,
• the narrowing of preferences for foreign investment and geographical location,
• a reorganized list of state-supported business sectors, now including services.
The key documents implementing these changes, issued on April 14 with effect from January 1 2008, are the following:1
• High- and New-Technology Enterprise Assessment Administration Measures (the Measures), and
• Catalogue of High- and New-Technology Industries Specifically Supported by the State (the Support Catalogue).
Foreign investors’ evaluation and implementation of HNTE establishment and related structuring and activities will also be affected by:
• separate continued...
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