Many countries across the world are working hard to promote research and development. China is one of the countries and has been in the frontline to ensure many research and development centers are established in the country. With proper research, many new technologies and applications are developed that improve production and efficiency in different sectors. This ensures that new products that address various needs of residents are released in the market. Ins Global Consulting is one of the companies that is providing solutions that help many companies who want to start and expand their operations in China. Below is a detailed discussion of various things you need to know when it comes to research and development in China.

Tax incentives

China is a country that values research and development.  With research and development, the country will grow economically. For that reason, in 2016 the country announced that all equipment imported for scientific research would be duty-free. This means that all research and development centers in the country can import advanced equipment needed for their research operations. This is a great thing for all investors and researchers who want to focus on research and development in China. On top of that, earnings from developed technology at any research facility in China are exempted from business tax. This is encouraging as many countries tax research centers heavily which is not good for their operations and growth.

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What should research and development centers focus on?

Not all research and development center will enjoy the tax incentives. Centers that focus on upgrades of existing products, quality control analysis, management studies and social sciences research are not eligible for exemption. The exemption if for centers that are dedicated to technological and scientific development activities.  They should research widely to improve technologies as well as products, obtain new technical and scientific knowledge and apply new knowledge in technology and science to come up with new products as well as technologies.

What are Qualified expenses for tax incentives?

There are many business expenses for research and development centers that qualify for tax incentives in China. Depreciation of research and development equipment, certification expenses, expenses for technical raw materials used in research processes and remuneration for centers’ staff are some of the expenses that qualify for R&D tax incentives. Apart from that, the government is actively checking for companies that don’t engage in beneficial research and development activities. On top of that, it rejects applications from centers that don’t have full-time staff as well as those that don’t identify eligible activities.

Documents needed to file R&D expenses

There are various documents needed when a research and development centers want to file their expenses. Some of the documents required include proposals for all projects, statements of approval for all projects, balances sheet for projects, the breakdown of expenses for all projects, list of personnel, project contracts and other documents needed by tax authorities.


From above it is evident that China is doing great to promote research and development. The country is offering tax incentives that encourage research and development activities. The centers need to engage in research and development activities that will bring new products and technology to the market.

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This Article Originally posted on January 3, 2020 @ 8:31 pm

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