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High-Tech Enterprise Tax Incentive Eligibility Updated

The State Administration of Taxation (SAT) has recently issued a clarification with regards to the criteria by which any high-tech enterprise can be deemed to be eligible for the government’s advantageous 15% corporate income tax incentive scheme.

The three key points of the update are as follows:

  • Having secured its accredited high-tech enterprise status, an enterprise may then apply for tax incentives within a year of the issuance of the accreditation certificate. It may then complete the required record filing formalities with the relevant tax authority in accordance with the prevailing regulations. 
  • In the year its high-tech enterprise status is due to expire and prior to having successfully secured re-accreditation, any such enterprise shall pay corporate income tax at a provisional rate of 15%. Should it fail to be re-accredited before the end of that year, it must make good any underpaid tax for this period in accordance with the official regulations.
  • Once an enterprise obtains high-tech enterprise status and becomes eligible for the relevant tax incentive, the tax department may ask the accreditation authority to conduct a re-examination if it deems said enterprise to have failed to meet the conditions set out in the Administrative Measures for the Accreditation of High-Tech Enterprises. If, upon re-examination, it is confirmed that the enterprise fails to meet the required accreditation conditions, the accreditation authority shall revoke its high-tech status. The tax authority may then seek to recover the outstanding tax sum for the period when the enterprise previously falsely represented itself as complying with the standards required of an approved high-tech enterprise.

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

Announcement on Issues concerning the Implementation of Preferential Income Tax Policies for High-tech Enterprises (Announcement No. 24 [2017])

Content provided by Picture: HKTDC Research
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