Indigenous Innovation Pilot Zone Tax Policies Extended Nationwide

On October 22, the State Council formally approved a plan to extend certain indigenous innovation tax policies nationwide, representing China's latest move in stimulating indigenous innovation-based development. 

For example, starting on October 1, equity investments in private/unlisted SMEs can receive a tax deduction equivalent to 70 percent of the investment amount on any capital gains resulting from the investment. 

 

A second policy states that companies can receive a tax exemption of 5 million RMB on any royalties gained from non-exclusive patent licensing agreements lasting more than five years, and a 50 percent tax reduction on the subsequent 5 million RMB resulting from the same patent licensing royalties.