AmCham Shanghai's Tax Committee invites you to join an offline presentation on the R&D-related tax benefits: opportunities and challenges for MNCs on September 18 from 14:00-15:00.
Innovation and R&D are an inexhaustible driving force and core to the competitiveness for long-term and sustainable development of an enterprise. The Chinese government attaches great importance to the role of R&D investment by enterprises in the national economy. In this regard, the government has introduced a series of R&D incentive programs, which entails the following:
- a reduced CIT rate of 15% offered to qualified high- and new technology enterprises ("HNTE") ;
- a reduced CIT rate of 15% offered to Advanced Technology Service Enterprise ("ATSE");
- a super-deduction at the rate of 175% eligible to be claimed for qualified R&D expenses of companies.
As a starting point, consideration needs to be given to the correlation of the IP arrangement/TP positioning of the China entity in the value chain and the R&D incentive that a company may claim.
In addition, in the process of applying for R&D incentives, companies often encounter the following difficulties due to reasons such as lack of comprehensive management of R&D activities and expenses, adopting a misleading accounting-driven methodology rather than a correct technology-driven methodology and ineffective internal communication:
- Unable to correctly and fully identify eligible R&D activities
- Low efficiency, information error and leakage, inaccurate or incomplete data and documents
- Unable to fully enjoy R&D incentives
- Lack of effective measures to mitigate tax risks
1) Overview of R&D tax incentive in China;
2) Pain points in R&D incentive application;
3) Successful HNTE, R&D super deduction, ATSE case sharing, which involves the disputes on IP arrangement, interpretation of R&D activities, expense recording, etc.