The Chinese tax authorities have announced a number of new tax breaks aimed at encouraging companies in the technology sector to engage in research and development activities.
According to reports in the Chinese media at the weekend, the State Council has approved new proposals allowing companies to deduct research and development expenses from their tax returns at a rate of 150%.
In addition, new technology enterprises located in national hi-tech zones will be exempt from taxes for two years, following which they will pay only 15% of the taxes charged to companies operating in traditional industries.
Furthermore, the State Council has approved plans allowing certain research centres in both the public and private sectors an exemption from other levies such as value added tax.
Venture capitalists and other organisations working in the hi-tech field have also been given favourable tax treatment, Xinhua, the state media outlet, has reported.
A more generous tax regime for exporters of hi tech products is also expected to be announced soon.
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