China Tax/Business News Flash

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Feb 2016, Issue 4

Improvement on the administrative measures for the assessment of HNTEs - New opportunities and new challenges

On 13 January 2016, Premier Li Keqiang presided over a State Council executive meeting where the decision was made to refine the administrative measures for the assessment of High and New Technology Enterprises (HNTEs). This decision is intended to benefit more science and technology enterprises, especially those small and medium-sized enterprises (SMEs), incentivise market entities to increase their Research and Development (R&D) input, propel the innovation of both individuals and enterprises, cultivate and create new technologies, new business models and new supplies, for the purpose of driving economic upgrade and development.

After the executive meeting, the Ministry of Science and Technology (MST), Ministry of Finance (MOF) and State Administration of Taxation (SAT) jointly released the Notice regarding the Amended <Administrative Measures for Assessment of High and New Technology Enterprises (HNTEs) > (Guokefahuo [2016] No.32, hereinafter referred to as ‘Circular 32’) on 29 January 2016, clarifying the assessment criteria and administrative matters for HNTEs. The highlights of the amendment include: 1) expanding the high and new technology areas specifically supported by the State and removing certain technologies in the previous areas; 2) adjusting certain assessment criteria and retaining the implicit requirement for enterprises to manage their HNTE qualifications systematically; 3) simplifying the assessment procedure to facilitate application process and establishing an administrative mechanism of selective examination and key examination.

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