China Tax/Business News Flash

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Jun 2016, Issue 20

New Working Guidelines for the Administration and Assessment of HNTEs - opportunities and challenges

In order to implement the State Council’s call to support start-ups and innovation as well as drive economic upgrade, the Ministry of Science and Technology (MST), Ministry of Finance (MOF) and State Administration of Taxation (SAT) (hereinafter collectively as "three Ministries") jointly released the Notice Regarding the Amendment of the "Administrative Measures for the Assessment of High and New Technology Enterprises (HNTEs)"(Guokefahuo [2016] No.32, hereinafter referred to as "Circular 32") on 29 January 2016, which provides the policy direction for HNTE’s assessment under a new regime.

After the issuance of Circular 32, the refinement of the supporting working guidelines has become the main focus of all relevant parties. Due to the absence of the latter, the HNTE assessment for 2016 has been suspended at local levels. Finally, on 22 June 2016, the three Ministries released the Notice Regarding the Amendment of the "Working Guidelines for the Administration and Assessment of HNTEs" (Guokefahuo [2016] No.195, hereinafter referred to as "the New Working Guidelines") to kick off the HNTE assessment under the new regime. The New Working Guidelines took effect from 1 January 2016.

Highlights of the New Working Guidelines include: 1) emphasis of the leading role of technology; 2) refinement of the evaluation mechanism of innovation capability; 3) clarification to the definition of certain terms for the purpose of assessment; and 4) enhanced supervision and administration.

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