R&D tax incentives · HNTE certification · 15% CIT rate
HNTE certification reduces corporate income tax from the standard 25% to 15% for qualifying enterprises. Foreign-invested entities with R&D activity in China are eligible: ownership is not a criterion. If your China entity develops intellectual property, this is worth ten percentage points of CIT. We are licensed to perform the certification audit, and we tell you plainly, and early, whether it is worth pursuing.
Timing
Certification is applied for, assessed against published criteria, and must be renewed. The audit is one input among several.
We review the entity against the published criteria and tell you where it stands before any application.
R&D expense compilation and the high-tech revenue ratio, tested and reported.
Certification is time-limited. Renewal needs the same discipline maintained across the period, not rebuilt at the end.
Scope of services
Written out in detail on purpose. If you are comparing firms, this is the list to put side by side with theirs.
Deliverables
A written view on whether the entity qualifies, and where the weak points are.
The signed report required for the application.
Qualifying R&D expenditure, compiled and reconciled to the accounts.
The high-tech revenue ratio, with the working shown.
What to change in the accounting and documentation before applying.
What to maintain through the certification period, and when.
Indicative fee
An HNTE application rests on five audit reports: three annual audits, an R&D expenditure special audit, and a high-tech revenue special audit. Enter three years of revenue and total assets and this prices all five on the scale we publish — figures in RMB 10k, so 1,000 means RMB 10 million.
Process
Entity type, what has been requested, and when it is due. One email is enough to start.
We come back within one business day with a written scope, a fixed fee and dates.
One document request list. We work from it, and visit site only where the work genuinely needs it.
Signed output in English or bilingual, plus support through whatever filing follows.
Fees
Fixed, in writing, before fieldwork starts. The drivers below are the ones that actually move the number — we tell you which of them apply to you in the first reply, not after you have signed.
FAQ
Yes. Ownership is not a criterion. What matters is that the China entity owns qualifying intellectual property, spends at least the required percentage of revenue on R&D, and derives at least 60% of its revenue from high-tech products or services. Several of the entities we have worked with on this are WFOEs with R&D centres in China.
Corporate income tax at 15% instead of the standard 25%, plus possible local incentives. For an entity with meaningful profit, that is ten percentage points a year for as long as certification is maintained (it runs for three years and is renewable).
A reduced corporate income tax rate for qualifying enterprises, plus possible local incentives. Whether it is worth the compliance effort depends on your profit level and how much of your activity genuinely qualifies.
Usually the R&D expense compilation not being separately and consistently tracked, or the high-tech revenue ratio falling short. Both are fixable, but not in the last month before submission.
The certification report itself is issued in Chinese because that is what the authority requires. We provide an English explanation of the figures alongside it.
Yes, and we recommend planning for it from the start. Renewal is much easier when the accounting discipline is maintained through the period rather than reconstructed at the end.
Tell us the entity and what it does. We will give you an honest assessment of the odds before you commit to an application.