Shanghai Municipality, Promoting the Practical Application of High and New Technology Achievements Several Provisions (Revised)

Promulgated: November 12 2000

Main contents: The amendments to the Provisions, include a new item applicable to foreign investment enterprises (FIEs) registered in Shanghai (Item 11). It is provided that an FIE initiating a new project for the practical application of high and new technology achievements to which the FIE has proprietary intellectual property rights, in the three years following the project's confirmation, is entitled to a refund of the land use fee and land grant payment related to the project land and a part of the taxes paid in acquiring the buildings required by the project. If an FIE's spending in China for technological development increases by 10% or more over the previous year, an additional 50% of the actual amount of such spending may be deducted from its taxable income in the current year subject to approval by the tax authority. A technology-intensive or knowledge-intensive FIE may enjoy a reduced income tax rate of 15% subject to approval by the tax authority. Equipment and related technology and parts imported by the research and development centre of an FIE may be exempt from customs duty and value-added tax if they are within the total investment amount and not available domestically. Technology transfer from FIEs, foreign enterprises or foreign nationals is exempt from business tax. Another new item in the amended Provisions aims to encourage the establishment of venture capital enterprises and their participation in transformation of high and new technological achievements (Item Three). Other amendments include priority status given to software, integrated circuits, biotechnology and Chinese traditional medicine projects (Item One), encouragement of overseas listing of high and new technology enterprises (Item Two) and encouraging the use of option schemes as incentives to persons who contribute to the practical application of high and new technology achievements (Item Six).
Related legislation: Central Committee of the Communist Party of China and State Council, The Decision on Strengthening Technological Innovation, Developing Advanced Science and Technology and Realizing Industrialization, 1999; PRC, Promoting the Practical Application of Scientific and Technological Achievements Law, May 15 1996, CLP 1996 No.6 p10 and State Council General Office, Transmitting the «Ministry of Science and Technology and other Ministries, Promotion of the Practical Application of Scientific and Technological Achievenemts Several Provisions»Circular