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Innovators to get tax benefits

Updated: Apr 20,2018 8:40 PM

In order for the whole society to respect science and innovation, the individual income tax levied on researchers on cash bonus received from the transfer and commercialization of technological achievements will be largely reduced.

The decision was made at a State Council executive meeting presided over by Premier Li Keqiang on April 18.

“Although financial input is required to push forward technological innovation, more efforts should be made to create a new mechanism to release researchers’ passion for innovation,” the Premier said.

Early in April of 2016, Premier Li said in a symposium held in Peking University that the personal grants for researchers in fundamental mathematics only took less than 30 percent in its research funding. But mathematicians’ own brains count the most in their research, so expenditures on researchers must be increased to spur their creativity, he said.

Also in 2016, at a national conference on science and technology, the biennial conference of the Chinese Academy of Sciences and Chinese Academy of Engineering, and the national congress of the China Association for Science and Technology, Premier Li urged reform on the remuneration distribution system to support researchers “to become rich in legitimate ways.”

According to the latest decision, tax deduction will be applied to scientific researchers in non-profit research institutions, colleges and universities.

If the researchers create proprietary technologies, software copyrights, new biological medicines and other innovations, and transform them through transferring or licensing, only half of the cash bonus received within three years after earning income from the commercialization of their scientific findings will be taxed as personal income.

“We should reduce tax to speed up transformation of technological achievements,” said the Premier at the meeting.