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China Extends VAT Exemption for Domestic R&D Equipment

China has announced it will continue to offer full VAT refunds on domestic equipment purchases by qualified and approved mainland-funded R&D institutions and foreign-invested R&D centres. Foreign-invested R&D centres must satisfy the specified conditions based on their time of establishment to enjoy the preferential policy.

Foreign-invested R&D centres must be reviewed and accredited by the competent department of commerce, in conjunction with the departments concerned, according to specified requirements. Centres that obtained tax refund qualification for the first time on or before 31 December 2018, or have passed qualifications review for less than two years, may continue to enjoy the tax refund until the end of the two-year period.

This refund policy shall be effective retrospectively from 1 January 2019 through 31 December 2020. Specifically, the policy shall be applicable to mainland-funded R&D institutions and foreign-invested R&D centres from the first day of the month following the month when they obtained the tax refund eligibility.

Full details can be found in Announcement No. 91 [2019] jointly issued by the Ministry of Finance, Ministry of Commerce and State Taxation Administration.

Source: Ministry of Finance

Content provided by Picture: HKTDC Research
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