This is not the document you are looking for? Use the search form below to find more!

Report home > World & Business

China VAT : Understanding the Eligibility for VAT Incentives in R&D Centers

0.00 (0 votes)
Document Description
China has provided clarification on certain Value Added Tax (VAT) incentives for purchase of equipment by foreign-funded Research and Development (R&D) centers. In a recent circular, authorities provided additional guidance on the eligibility requirements and criteria for claiming the tax exemption.
File Details
  • Added: November, 15th 2011
  • Reads: 212
  • Downloads: 0
  • File size: 201.08kb
  • Pages: 2
  • Tags: doing business overseas, global transfer pricing, regulatory filings, international expansion, expat tax advice, intercompany transfer pricing
  • content preview
Submitter
Embed Code:

Add New Comment




Related Documents

What You Need to Know About VAT Refunds for Foreign R&D Centers in China

by: nair & co., 1 pages

The status of qualified R&D centers to be reviewed and verified by the department of commerce and other relevant departments.

As MNC R&D centers in India invest for accelerated growth & value creation, operations costs rise by 9% in FY2011: Zinnov Study

by: donaldhood, 2 pages

(1888PressRelease) Zinnov Management Consulting, a leading globalization advisory firm, today released the latest report in its much sought after series on operations cost benchmarking for MNC ...

Operating Costs for MNC R&D Centers in India Decline by 6% in US$ Terms in FY12

by: donaldhood, 2 pages

(1888PressRelease) MNC R&D centers in India added to a cumulative saving of over US$ 70 Bn in the last 5 years.

China extends import tax exemption & VAT refunds for foreign R&D centers

by: nair & co., 1 pages

Chinese authorities have recently announced that the import tax exemption on purchases of certain R&D equipment and devices by foreign invested R&D centres would continue.

Finland Outlines Tax Measures for 2013-2016: R&D Incentive Introduced, VAT Rates Increased

by: nair & co., 1 pages

Finland has outlined tax measures spanning 2013-2016 that include R&D incentive rates, increase in VAT rates and updates on Corporate Taxation updates

The Need for Marketing Automation in Lead Generation

by: merlinf, 2 pages

Today, there is a huge increase in the number of channels marketing uses for creating brand awareness and for generating leads. Despite this, there is a visible shortfall in the number of quality ...

Understanding the Role of E-discovery in Corporate Litigation

by: martinwell, 1 pages

The globalized business world with its technologically enabled environment handles all the transactions and business communications in digital format. Access to this information for modification or ...

Guide to The Top 50 Construction Projects in Europe & Asia-Pacific

by: carolnelson, 2 pages

ReportsnReports.com adds new market research reports “The Top 50 Construction Projects in Europe: Project Guide” and “The Top 50 Construction Projects in Asia-Pacific: Project ...

Memorandum of Understanding Between The Office of Regulatory Affairs and The Center for Drug Evaluation and Research on the Pharmaceutical Inspectorate

by: samanta, 4 pages

FDA oversees the quality of drug products using a two-pronged approach involving review of infonnation submitted in applications as well as inspection of manufacturing facilities for confonnance to ...

Understanding the Norms for India’s Exit Scheme for Defunct Companies

by: nair & co., 2 pages

India’s popular Easy Exit Scheme (EES) that allows defunct companies to get their names removed from the Register of Companies has been extended.

Content Preview
China VAT : Understanding the Eligibility for VAT Incentives in R&D Centers
China has provided clarification on certain Value Added Tax (VAT) incentives for purchase of equipment by foreign-
funded Research and Development (R&D) centers. In a recent circular, authorities provided additional guidance on
the eligibility requirements and criteria for claiming the tax exemption.
China VAT R&D: Highlights from Circular (93)
Clarification of certain criteria for import VAT exemption for foreign-funded R&D centers (Circular 115)
Circular (93) clarifies that the relevant commerce authorities must approve the establishment of foreign-
funded Research and Development centers.
Circular (93) specifies that the annual R&D expenditure (as stated in Circular 115) refers to the average
annual R&D expenditure of the last two years.
Circular (93) provides the definition of full-time R&D personnel (as stated in Circular 115).
Circular (93) clarifies that equipment orders already made and where the delivery is by the end of 2010
can be regarded as qualifying equipment.
Verification of eligibility requirements
Circular (93) clarifies that relevant commerce authority will review and inspect the application of the foreign-
funded Research and Development center. It also specifies that status of the approved foreign-funded Research
and Development centers will be revisited every two years. For centers that are disqualified, the VAT exemption
and VAT refund will be revoked.
Supervision of tax exempted/refunded equipment
Circular (93) clarifies that there is emphasis on the supervision of the tax exempted or refunded equipment. A
foreign-funded Research and Development center could incur a penalty for transfer, sale, disposal or use of the
equipment for another purpose without approval.
China VAT R&D: The Background
Earlier, authorities allowed general VAT taxpayers to deduct input VAT incurred on purchases of fixed assets from
their output VAT. Exemption from import VAT on equipment for R&D centers was also abolished, adversely
affecting the R&D centers as they are not general VAT taxpayers and cannot credit input VAT incurred on
purchased equipment against the output VAT. Later authorities moved to resolve this issue and the Ministry of
Finance (MOF), General Administration of Customs (GAC) and State Administration of Taxation (SAT) jointly issued
a circular (Circular 115) stating import VAT Tax exemption is available on equipment imported by R&D centers and
a full VAT refund is available on domestically-manufactured equipment purchased by the centers.
VAT Exemption on Imported Equipment
The import VAT exemption to foreign-funded Research and Development centers includes independent legal
entities, R&D departments or R&D branches of foreign-invested companies provided certain conditions are met.

Financial benefits are a critical factor in your international business expansion. As the main goal of any business is
to make profits, any incentives that a government has to offer makes it more attractive to set up a business in a
particular country. Therefore partnering with an expert can help tremendously in understanding the complexities
of taxation be it VAT or tax equalization expat or internal audit compliance. Professionals have the expertise to
guide and ensure a trail blazing success in your international expansion
Click here for more on international financial reporting & intercompany transfer pricing



Download
China VAT : Understanding the Eligibility for VAT Incentives in R&D Centers

 

 

Your download will begin in a moment.
If it doesn't, click here to try again.

Share China VAT : Understanding the Eligibility for VAT Incentives in R&D Centers to:

Insert your wordpress URL:

example:

http://myblog.wordpress.com/
or
http://myblog.com/

Share China VAT : Understanding the Eligibility for VAT Incentives in R&D Centers as:

From:

To:

Share China VAT : Understanding the Eligibility for VAT Incentives in R&D Centers.

Enter two words as shown below. If you cannot read the words, click the refresh icon.

loading

Share China VAT : Understanding the Eligibility for VAT Incentives in R&D Centers as:

Copy html code above and paste to your web page.

loading