More tax incentives on offer

More income tax incentives will be made available to venture capital funds to drive entrepreneurship and innovation, the State Council executive meeting chaired by Premier Li Keqiang decided on Dec 12.

The tax cut came after a move by the government to introduce a similar tax relief for venture capital firms, under which their taxable income is deducted by an equivalent of 70 percent of their seed investment in hi-tech startups, according to a statement released after the meeting.

To further incentivize venture capital investment, firms that choose to have their taxes calculated from single investment funds will see their individual partners pay personal income tax on their earnings from share transfers and stock dividends set at 20 percent, the statement said.

For properly filed venture capital firms who choose to have their taxes calculated based on the firms’ annual income, their individual partners shall pay personal income taxes on their earnings in the firms at progressive tax rates from 5 percent to 35 percent, it said.

This policy will be effective for five years starting from Jan 1, the statement said.

The meeting also approved candidates and categories for the country’s top science awards for 2018, as part of efforts to encourage more researchers to devote themselves to research in various cutting-edge technologies.