Equipment tax break for R&D centres
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clpstaff &clp articlesThough new measures provide clarifications about R&D centre eligibility requirements for equipment tax benefits, investors should pay attention to several issues
On October 10 2009, the Ministry of Finance (Mof), the General Administration of Customs (GAC) and the State Administration of Taxation (SAT) issued the Circular on Taxation Policies on Purchasing of Equipment by Research & Development Institutions (财政部、海关总署、国家税务总局关于研发机构采购设备税收政策的通知(财税[2009]115号)) (Cai Shui [2009] No. 115) (Circular 115). Circular 115 stipulates that qualified foreign-invested research and development (R&D) centres are eligible for tax exemption on relevant items imported for scientific and technological R&D purposes. They can also enjoy a full value-added tax (VAT) refund when purchasing domestic-made equipment.
Furthermore on March 22 2010, the Ministry of Commerce (Mofcom), Mof, GAC and SAT jointly issued the Circular on Measures for Reviewing the Qualifications of Foreign-invested Research and Development Centres for Tax Exemptions/Refunds on Procured Equipment (商务部、财政部、海关总署、税务总局关于外资研发中心采购设备免/退税资格审核办法的通知(商资发[2010]93号)) (Shang Zi Fa [2010] No. 93) (Circular 93). Circular 93 clarifies in detail the tax exemption on relevant items imported for scientific and technological R&D purposes, and the VAT refund for purchasing domestic-made equipment by foreign-invested R&D centres.
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