Guangzhou was approved by the State Council as one of the 15 service and trade innovation development pilots in February 2016. Several ministries and commissions of the central government jointly issued the Circular on Promoting Corporate Income Tax Preferential Policies for Technology-advanced Service Enterprises in Service and Trade Innovation Development Pilots, which defines eight kinds of service and trade enterprises from four categories that can enjoy the corporate income tax preferential policies. Guangzhou embraces the national policy dividend as a pilot city.

 

Eight kinds of service and trade enterprises in the four categories of the computer and information service, R&D and technical service, cultural and technical services and traditional Chinese medicine services can enjoy the corporate income tax preferential policy: qualified technology-advanced service enterprises can enjoy a 15% reduction of the corporate income tax; qualified technology-advanced service enterprises are allowed to deduct the part of actual employee education expenditures that does not exceed 8% of the total salaries and wages when calculating the corporate tax payable; and the part exceeding 8% can be carried forward to and deducted in the following taxation years.

 

Guangzhou Municipal Commission of Commerce said the enterprises that apply for the certification of technology-advanced service enterprise must concurrently meet conditions of the abovementioned eight kinds of service and trade enterprises that business revenues from technology-advanced services should account for more than 50% of the total revenue of the enterprise of the year and the revenue from the offshore businesses should not be lower than 35% of the total revenue of the year.

 

Source: Translated from Invest Guangzhou, December 6, 2016