(I) Measures for Accelerating Innovation-Driven Development
1. For projects closely related to Xiamen’s industries that receive financial support for the nation’s major sci-tech projects, key R&D projects or major sci-tech achievements commercialization projects, matching financial support equal to 50% of the actual amount of state funding will be provided; this matching financial support is capped at RMB 10 million.
Leading enterprises in the industry (ranked among the top three nationally) receive support in spearheading major national sci-tech projects and key R&D projects. They are eligible for a matching reward equal to 100% of the actual amount of state subsidies that they have received
2.Newly approved national-level laboratories are eligible for a one-time reward of RMB 30 million.National-level key laboratories rated as excellent in performance evaluations are eligible for a reward of RMB 2 million; Municipal-level key laboratories rated as excellent in performance evaluations are eligible for a reward of RMB 500,000. Municipal-level key laboratories rated as good in performance evaluations are eligible for a reward of RMB 200,000.
3.Validated new-style R&D institutions are eligible for a subsidy of RMB 1 million, while validated crucial R&D institutions are eligible for a subsidy of RMB 5 million. In addition, they may also apply for subsidies of up to RMB 50 million for R&D equipment purchases. New-style R&D institutions are eligible for a reward of RMB 200,000 for each successfully incubated national-level high-tech enterprise. Crucial R&D institutions will be evaluated on a biennial basis, and will be given a performance reward of up to RMB 5 million depending on the evaluation results. Technology transfer institutions set up in Xiamen with filing for record are eligible for an annual subsidy of RMB 500,000 for three consecutive years after the first year of stable operation.
4.Enterprises can obtain up to 20 million yuan of science and technology guaranteed loans, 5 million yuan of science and technology credit loans and 3 million yuan of science and technology guaranteed insurance loans, and also enjoy subsidies.
5.Public technology service platforms which are primarily built by enterprises and operate according to market principles and which are rated as excellent in the annual performance evaluation are eligible for a reward equal to 10% of the annual technology service revenue. The reward is capped at RMB 500,000 per year.
6.For technology development, transfer, consultancy and service contracts signed by Xiamen-based corporate or public institutions, after being validated and registered by the competent authority, the institutions are eligible for a reward equal to 0.8% of the actual annual amount of transaction for the portion of amount that is no more than RMB 30 million, and they are eligible for a reward equal to 0.2% of the actual annual amount of transaction for the portion of amount that exceeds RMB 30 million. The reward for each institution is capped at RMB 1 million per year.
7. Industrial and software enterprises above the designated scale, as well as IT enterprises, that have annual indigenous R&D expenditures of RMB 10 million or more, are encouraged to establish collaborative laboratories with universities, research institutes, and provincial innovation laboratories. These enterprises are eligible for a subsidy of 10% of the non-governmental investment in the newly added R&D equipment (including software) of the joint laboratory, up to a maximum subsidy of RMB 10 million. Moreover, qualified enterprises can receive financing support of up to 80% of the total investment, with a maximum limit of RMB 100 million. The fixed financing cost is set at 2% per year, and the difference between the bank interest rate and the enterprise’s financing cost will be subsidized with government financial revenues. The subsidized financing interest is available for a maximum period of 5 years.
8.Enterprises with annual indigenous R&D expenditures of RMB 10 million or more will be granted recognition as “Xiamen [Company Name] [Core R&D Direction] [Research or Innovation Center]”. Additionally, the enterprise may apply for two units of affordable housing, which will be distributed by the enterprise itself. For every additional RMB 5 million in annual indigenous R&D expenditures, the enterprise may apply for an additional unit of affordable housing.
9.Industrial and software enterprises above the designated scale, as well as IT enterprises, are entitled to a subsidy equal to 30% of their actual expenditures on their use of shared scientific instruments and equipment. Each qualified enterprise is eligible for a maximum subsidy of RMB 500,000 per year. The operator of the scientific instrument and equipment sharing platform, which provides shared services for enterprise R&D, is entitled to an operational reward equal to 1% of their annual service fees, up to a maximum of RMB 2 million.
10.Priority support is provided to industrial and software enterprises above the designated scale, as well as IT enterprises, through a combination of rewards and subsidies to facilitate their R&D:
(1) Subsidies: For enterprises that have annual indigenous R&D expenditures exceeding RMB 2 million and show growth compared to the previous year, a subsidy of RMB 100,000 will be provided for every RMB 2 million spent on R&D, up to a maximum subsidy of RMB 5 million.
(2) Rewards: For enterprises that have annual indigenous R&D expenditures exceeding RMB 5 million and achieve a growth rate of over 20%, a reward of RMB 300,000 will be given. For those with a growth rate exceeding 40%, a reward of RMB 500,000 will be provided.
(3) For enterprises that have annual indigenous R&D expenditures exceeding RMB 10 million, an additional subsidy equal to 5% of the regular subsidies for R&D expenditures will be provided.
11.A new system called “Leading the Charge through Open Competition” is being implemented, where enterprises present their R&D requests, those capable provide solutions, the government provides subsidies, full authorization is granted, and a timed challenge is set for the development of the required technology. Projects under this system will receive financial support equal to 30% of the total R&D investment, up to a maximum of RMB 10 million. The allocated funds for the responding party can be transferred to non-local organizations for the specific task at hand.
12. Enterprises with strong capabilities in integrating technological innovation resources are encouraged to initiate collaborations with upstream and downstream enterprises in the industry, as well as universities, research institutes, and other scientific organizations. These collaborations should aim to establish systematic and task-oriented innovation alliances and manufacturing innovation centers, and undertake joint innovation research or develop public technology service platforms. Innovation alliances can receive financial support of up to RMB 20 million for their proposed science and technology projects.
(II) Preferential Tax Policy for Tech Enterprises
1. Preferential Treatment for High-Tech Enterprises: A reduced corporate income tax rate of 15% is applicable to enterprises satisfying the conditions in the tax laws. For enterprises registered in Siming and Huli Districts, starting from the tax year in which they obtain their first productive or operating income, they will be exempted from corporate income tax for two years, and pay corporate income tax based on 50% of the statutory tax rate for three years thereafter. Among enterprises with revenue of less than RMB 20 million in the previous year, those validated as national-level high-tech enterprises for the first time or revalidated as such are eligible for a reward of RMB 100,000. Among enterprises with revenue of RMB 20 million or more, those validated as national-level high-tech enterprises for the first time are eligible for an additional reward of RMB 300,000, while those revalidated as such are eligible for an additional reward of RMB 200,000. Within the period of eligibility, a one-off municipal-level relocation reward of RMB 1 million will be given to national-level high-tech enterprises whose revenue reaches RMB 20 million or more within a year after relocating to Xiamen in their entirety or in the next fiscal year following the relocation, and the district will also provide a matching reward at a ratio of no less than 1:1.
2. Pre-Tax Deduction for R&D Expenses: For R&D expenses actually incurred in R&D activities by manufacturing enterprises, if such expenses satisfy the conditions and have not been included in the profits and losses of the current period because no intangible assets have been created, then on top of the prescribed factual deductions, an additional pre-tax deduction at 100% of the actually incurred sum is permitted as of January 1, 2021. If an intangible asset has been created, pre-tax amortization at 200% of the cost of the intangible asset is permitted as of January 1, 2021. In industries other than manufacturing, for R&D expenses actually incurred in R&D activities, on top of the prescribed factual deductions, an additional pre-tax deduction at 75% of the actually incurred sum is permitted if no intangible asset has been created and included in the profits and losses of the current period; and pre-tax amortization at 175% of the cost of the intangible asset, if created, is permitted.
3. Technology Market (Contract) Tax Concessions: VAT is exempted for taxpayers providing technology transfers, development and related consulting and services. For technology transfers satisfying the conditions, the portion of the income at or below RMB 5 million will be exempted from corporate income tax, and the portion of the income over RMB 5 million will be subject to corporate income tax at half of the statutory tax rate.
4. Tax Concessions for Technologically Advanced Service Enterprises: A reduced income tax rate of 15% is applicable to enterprises satisfying the conditions in the tax laws. For employee education expenses incurred, the portion at or below 8% of the total wages and salaries is allowed to be deducted when computing the taxable income. The excess portion is allowed to be carried forward for deduction in subsequent tax years. The districts offer one-off rewards from their financial revenue: for validated technologically advanced service enterprises, the reward is RMB 250,000 in Tong’an District, RMB 200,000 in Siming District, and RMB 300,000 in the Torch High-Tech Zone (enterprises are entitled to the reward from a single district).
5. Validation of High-Tech Achievements Commercialization Projects: 60% of the locally retained portion of the VAT already paid will be refunded for two years starting from the year of validation.
