Companies investing in Chinese high-tech enterprises could cut their tax requirement by 40 percent in certain sectors.
A number of New Zealand companies have invested in ICT and biotech sectors in China.
Some of them can now be classified as high-tech enterprises and may be eligible for reduced corporate income tax rate at 15 percent. The usual corporate income tax rate is 25 percent levied on both Chinese and foreign enterprises not classified as high-tech.
China's State Administration of Taxation has recently released new criteria for high-tech enterprises. The criteria sets a threshold for companies to enjoy the reduced tax rate.
As one of the new criteria, high-tech enterprises should be engaged in at least one of the following priority sectors supported by the Chinese government:
- electronics and information technology
- biological and pharmaceutical technology
- aviation and astronautics technology
- new materials technology
- high-tech services
- new energy and energy-saving technology
- resource and environment technology
- application of high-tech to transform traditional industries
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