Turn your investment in technology into tax savings and business support.

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If your company develops products, software, technology, or production processes in China, you may qualify for tax incentives or government support.

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China’s 15th Five-Year Plan (2026–2030) reinforces the focus on innovation, AI and advanced manufacturing, making this a timely opportunity to review what your business could qualify for.

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These opportunities can also be available to foreign-invested companies. The challenge is understanding which programs fit your business, demonstrating that you meet the requirements, and keeping the right records.

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OPING helps you identify the opportunities worth pursuing, prepare applications and claims, and maintain the compliance needed to keep the benefits.

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Could your company qualify?

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You do not have to operate a research laboratory to explore innovation incentives. Depending on the program, relevant activities may include:

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• Developing software, AI applications or digital products.

• Creating new products, materials or manufacturing processes.

• Making substantial technical improvements to existing products or processes.

• Developing technology for customers or transferring technology to other businesses.

• Investing in eligible computing resources, AI models or development data.

 

Eligibility depends on the work actually performed, where it takes place and how it is documented. Simply using AI or purchasing technology does not automatically make a company eligible.

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We start by understanding your business and identifying the opportunities worth pursuing.

 

What benefits may be available?

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1. High and New Technology Enterprise: a lower income tax rate

 

Companies recognised as a High and New Technology Enterprise (HNTE) may qualify for a 15% corporate income tax rate, compared with the standard 25%.

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For illustration, on RMB 1 million of taxable profit, this means RMB 150,000 of tax instead of RMB 250,000—a potential saving of RMB 100,000, assuming no other relief applies.

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Recognition depends on several factors, including the company’s technology, intellectual property, R&D spending, personnel, and income from qualifying products or services. Having patents alone is not enough.

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OPING helps assess eligibility, prepare the application and supporting evidence, and manage subsequent reporting and reapplication requirements.

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2. R&D Super Deduction: deduct more than you spend

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The R&D super deduction allows eligible companies to deduct more than they actually spend on qualifying research and development when calculating taxable profit.

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Under the general rule, RMB 1 million of eligible R&D expenses may generate a total tax deduction of RMB 2 million:

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• RMB 1 million for the actual eligible expense.

• An additional RMB 1 million under the 100% super deduction.

 

The additional deduction could reduce income tax by RMB 250,000 at a 25% tax rate, provided the company has sufficient taxable profit. This is a tax saving, not a cash reimbursement.

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Where qualifying expenditure creates an intangible asset, the general rule allows deductions over time based on 200% of its cost.

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OPING helps identify eligible R&D projects and costs, organise supporting records and coordinate the tax claim.

 

3. VAT relief for qualifying technology contracts

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Qualifying technology development, technology transfer and closely related consulting or technical services may benefit from VAT exemption from January 1, 2026 to December 31, 2027.

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This does not cover every consulting or technical service. The nature of the work, contract terms, and supporting procedures matter.

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OPING helps review the arrangements, coordinate technology contract registration where required and prepare the documents supporting the exemption.

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4. Additional incentives for specific industries

 

Further support may be available for qualifying businesses in:

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• Software and integrated circuits: income tax exemptions, reductions and other sector-specific benefits, depending on the category and applicable requirements. Some schemes require inclusion on an official qualifying list.

• Advanced manufacturing: eligible companies may receive an additional VAT offset equal to 5% of qualifying deductible input VAT, through December 31, 2027. This reduces VAT payable; it is not a five-percentage-point reduction in the VAT rate.

 

We help determine which provisions apply and whether the expected benefit justifies the preparation and ongoing obligations.

What about AI and Shanghai’s local programs?

 

Shanghai supports AI development and adoption through programs that include computing-power, model, and data-corpus vouchers. These can help eligible businesses with approved costs associated with computing resources, AI models, and data used for development.

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Location can also matter. For example, qualifying companies undertaking specified activities in artificial intelligence, integrated circuits, biomedicine and civil aviation in Lin-gang may qualify for a 15% corporate income tax rate for five years from establishment, subject to the applicable conditions.

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These programs have different eligibility rules, application windows, and funding conditions. We assess the relevant opportunities for your business and check which programs are open before recommending an application.

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How OPING helps

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First, establish whether there is a realistic opportunity

 

Our specialist team reviews your products and technology, R&D projects, intellectual property, employees, revenue, and financial records.

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We explain which incentives appear relevant, where the gaps are, and whether you are ready to proceed. If further preparation is needed, we help you understand what to address.

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Then, build the supporting evidence

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A strong application needs a clear connection between the technical work, the people involved, the expenditure and the resulting products or services.

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We help organise project records, technical explanations, intellectual property documents and R&D accounts. We also coordinate any required specialist audits and work with your technical and finance teams to resolve inconsistencies.

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Prepare the application or tax claim

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Different incentives follow different procedures. Some require formal recognition or approval; others are claimed through tax filings with supporting records retained.

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We help prepare the appropriate submissions, coordinate with the relevant authorities and respond to requests for clarification.

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Keep the benefits properly supported

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Our work can continue through annual reporting, tax filings, qualification reviews and reapplications.

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We help you maintain the records and internal processes needed to support the benefits as your business changes.

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A practical, selective approach

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We recommend pursuing an incentive when there is a credible case and a worthwhile commercial benefit.

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You receive a clear assessment of the potential value, preparation required and continuing obligations. Where several incentives may apply, we review how they interact rather than assuming every benefit can simply be added together.

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Success-based fees for selected engagements

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We succeed when you succeed.

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For selected engagements, OPING can offer a success-based professional fee arrangement, linking our fee to an agreed outcome.

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We define what counts as success, when the fee becomes payable, and any separate audit or third-party costs before work begins.

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This aligns our interests with yours while keeping the scope and costs clear.

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Why OPING?

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Since 2002, OPING has helped foreign-invested companies navigate China’s legal, tax, regulatory, and business environment.

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Our specialist team brings together technology incentive experience, tax knowledge and practical understanding of application requirements. We help your technical and finance teams present a clear, consistent account of the work your company is doing.

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Developing technology or investing in R&D in China?

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Tell us about your business and current projects. We can help you understand which incentives may fit, what evidence is needed, and whether an application is worth pursuing.

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Contact OPING to discuss your opportunities.