Xiamen Bureau of Science and Technology announced on June 26 that the city's preferential policy on development and research (R&D) costs deductions attracted the largest-ever number of enterprises to enjoy the biggest amount of subsidies in 2018.
Statistics show that the number of local companies applying for R&D costs deductions grew 413 to 3,088 in 2018, up 15.44 percent year on year. With a total turnover of 384.02 billion yuan ($55.94 billion), the companies claimed a deduction of 13.64 billion yuan, a year-on-year growth of 21.55 percent.
They also enjoyed a 1.75 billion yuan deduction on corporate income tax, rising 58.25 percent over the previous year. An official from the bureau explained that the rapid increase of this term was due to the fact that the proportion of pre-tax deduction on R&D costs has climbed from 50 to 75 percent.
Enterprises conducting R&D activities, whether they are high-tech or not, can enjoy the preferential policy. It is this move that has contributed to 1,643 non-high-tech enterprises being granted R&D costs deductions in 2018. A total of 1,445 high-tech enterprises also enjoyed a combined deduction of R&D costs and 15 percent of their corporate income tax. Eighty-five enterprises that have not yielded business profits can also enjoy R&D costs deductions once they start to make profits.
These were part of Xiamen's scheme to support local enterprises with R&D costs subsidies. The first city in Fujian province to implement such a preferential policy in 2016, Xiamen has seen a total of 4,160 local enterprises gaining an aggregated subsidy of 1.51 billion yuan in the past three years, infusing great momentum into their R&D.