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Income Tax Concessions Rolled Out for Advanced Technology Service Businesses

Advanced technology service companies are to benefit from a raft of tax incentives intended to both boost competiveness and fund ongoing technological upgrades. The move was outlined in a circular jointly issued by a number of government departments, including the Ministry of Finance and the General Administration of Taxation.

On a nationwide basis, the two tax concessions listed below are to be retrospectively implemented, with both incentives deemed to have come into effect as of 1 January 2017.

  1. The income tax liability of officially-recognised advanced technology service businesses is to be reduced to 15%.
  2. The total sum of all staff training costs incurred by recognised advanced technology service businesses can be deducted from the overall income tax liability up to a maximum of 8% of the annual wages bill. Any sum above this 8% can be carried over and will be deemed to be deductible in the following tax year.

In order to qualify for these incentives, a company must be a recognised provider of advanced technology services and be registered in China (excluding businesses registered in Hong Kong, Macau or Taiwan). They must also comply with all of the requirements detailed in the prevailing circular.

For further details (in Chinese), please refer to the following link:

Circular on Nationwide Extension of the Enterprise Income Tax Policies for Advanced Technology Service Enterprises (Cai Shui No. 79 [2017])

Content provided by Picture: HKTDC Research
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