Tax incentives
- Affirmed and qualified high-tech enterprises shall be levied corporate income tax at a rate of 15% of corporate income.
- When levying tax, 50% of total expenses arising out of researching and developing new technologies, new products and new techniques shall be deducted from taxable income of enterprises.
- Research and development institutions importing research and development supplies which can not be produced in China or whose performance can not meet the requirements in a reasonable amount and in compliance with related conditions shall be exempt from import duties and import value-added tax and consumption tax.
- Venture capital investment companies which have made an equity investment in unlisted small and medium sized high-tech enterprises for more than two years and comply with the relevant conditions can offset 70% of the amount invested against business taxable income after holding equity for two years; any excess amount not offset due to insufficient taxable income can be carried forward for offsetting in succeeding tax years.
- Qualified science and technology business incubators and national university science technology parks providing incubator clients with promises and land free of charge or in other ways (renting) shall be exempt from property tax and urban land use tax; the income arising from their leasing premises and land to incubator clients or providing incubation services shall exempt from sales tax; the income of qualified non-profit organizations shall enjoy preferential policies in accordance with the relevant provisions of tax law.
After being affirmed and since the first profit-making year, new software companies shall enjoy exemption from corporate income tax in the first and second profit-making years and shall reduce corporate income tax by half from the third to the fifth profit-making year. IC design enterprises shall be regarded as software businesses and enjoy the same policy.
IC manufacturing enterprises with investment of more than 8 billion yuan or integrated circuit line being less than 0.25-micron wide shall be levied tax at a tax rate of 15% of corporate income tax. Among them, enterprises with an operation period of over 15 years since the first profit-making year shall enjoy exemption from corporate income tax from the first to fifth profit-making years and shall reduce corporate income tax by half from the sixth to the tenth years.
After being affirmed and since making profits, integrated circuit production enterprises with production line being less than 0.8 microns (inclusive) wide shall enjoy exemption from corporate income tax in the first and second profit-making years and shall reduce corporate income tax by half from the third to the fifth profit-making years.
Subsidy Support
The tax part which is levied on recently established regional headquarters set up by multinational corporations, enterprises directly under the central government, top 500 enterprises in China and the top 500 private enterprises and is retained as local financial revenue shall give 100% of subsidies in the first three years and grant 50% of subsidies in the following three years. Regional headquarters which meet certain conditions and construct on their own or purchase or rent office or housing for commercial use shall be granted 100% of subsidies in a lump sum. Foreign staff who work for regional headquarters and need multiple entry and exit permissions may apply for one-year visit visa. Foreign senior management or important professional or technical staff who need to reside in Qingdao for a long period may apply for a residence permit which will be valid for 1 to 5 years.
R&D institutions with independent accounting set up by multinational corporations and large domestic enterprises in the zone shall enjoy relative preferential policies for high-tech enterprises in accordance with the relevant provisions of tax law after being affirmed. The newly levied tax on them as part of local financial revenue shall give 100% of subsidies in the first three years and grant 50% of subsidies in the following three years. Income arising from technological development, transferring and related technological consultation and service by foreign-funded R&D institutions shall be exempt from sales tax after obtaining approvals.
Personal income tax paid by senior management and R&D staff of regional headquarters, R&D centers, the world's top 500 enterprises and retained as local financial revenue shall offer incentive to them to subsidize their purchase of cars and residence. Medical records for highly qualified talents shall be set up and shall open channels for their medical treatments. Foreign staff relocating to the zone can settle the formalities of changing abode in Qingdao and their children can study in schools in Qingdao according with the Regulations on Children of Foreign Technical Staff Enrolling in Schools in Qingdao.
Fund Support
The Qingdao Service Outsourcing Development Special Fund is used to facilitate a national service outsourcing base and software export base, support personnel training, business certification, construction of public platformsand market exploitation, and to offer support when purchasing and leasing housing, loans and taxation.
As a supporting fund of the National Science & Technology Innovation Base for Rejuvenating Trade, Qingdao Municipal Science and Technology Special Fund is used to support a service system for export product innovation technology and to assist in the construction of public technology service platform and encourage high-tech product export enterprises to carry out technological reform, research and development.
For high-tech enterprises invested in the zone and international and domestic R&D institutions with independent accounting and financing, support shall be rendered to their capital costs and R&D expenditures.