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Four pilot policies first launched in Zhongguancun Science Park have been promoted in the Hefei-Wuhu-Bangbu Science Park and Mianyang Science and Technology City since January 1, 2015, according to the Ministry of Finance and State Administration of Taxation on June 11.
The first policy awards technological staffs equities and amortizes individual income tax in five years.
The second gives tax deductions of 70 percent to partnership ventures invested in medium and small hi-tech corporations for more than two years.
The third allows tax deductions on income from technology ownership or right of use transfers.
Fourth, medium and small technological corporations may be able to amortize individual income tax in five years.
The executive meeting of the State Council on Dec 3 2014 decided to further promote the ten policies launched in Zhongguancun Science Park. Of these, six have been promoted nationwide. The four policies above will be promoted to demonstration areas.
Moreover, research in new pilot policies was highly encouraged in the executive meeting.
Since the approval of Zhongguancun Science Park by the State Council in 2009, two sets of pilot policies have been launched in Zhongguancun in 2010 and 2013.
Take the policy concerning the private income taxation as an example. Before the pilot policy, technological staffers who had been awarded equities had to pay individual income taxes. The equity award is different from cash award. It is difficult for staffers to pay off the taxation at once. Therefore, the policy enabling staff to amortize taxation in five years has been launched in Zhonguancun by the Ministry of Finance and State Administration of Taxation.
According to the policy, if a staffer awarded with equity worth 500,000 yuan ($80,550) does not transfer the equity in five years, he or she does not need to pay individual income taxes. But after five years, the staffer has to pay off the taxes in one transaction. If the staffer transfers equity worth 300,000 yuan ($48,330) in the second year, he or she has to pay for individual income tax for 300,000 yuan.
Generally speaking, the pilot policies have promoted the innovative development of Zhongguancun Science Park, improved the efficiency of corporations and institutes, and stimulated technological staffs.
In detail, drive force of integrated innovation, atmosphere of innovation and entrepreneurship, and preferential policy environment has been formed. Innovation and entrepreneurship is becoming extremely active in Zhongguancun. The amount of venture capital and investment cases take up one third of the national total. New type entrepreneurship services focusing on "incubation and investment" are emerging.
Establishing start-ups is popular among technological talent and overseas returnees. The number of newly established start-ups reached 13,000 in 2014, twice as many as the number in the year before.
In addition, innovative technological results are born continuously. The role of supporting strategic emerging industries has been played completely. Zhongguancun is making breakthroughs in industries such mobile telecommunications, integrated circuit facilities, navigation systems, and train control systems.
The turnover of technological contracts in Zhongguancun has reached 313.6 billion yuan ($50.5 billion). Around 80 percent of technological results were achieved outside Beijing. The supportive ability to demonstrative areas nationwide has been further improved.
The size and quality of innovative and high technological industry has been growing. The overall revenue of corporations based in Zhongguancun reached 3.6 trillion ($570.1 billion) in 2014, increasing 556 billion yuan ($89.6 billion) over the year before. Both profit and taxation increased more than 20 percent year to year. The annual revenue growth rate on average since the approval of the science park in 2009 reached 25.9 percent. Around 23 percent of Beijing's GDP came from Zhongguancun in 2014. Zhongguancun contributed to more than 40 percent of the city's economic growth.
