I. Background

In alignment with the Notice on the Import Tariff Policies Supporting Scientific and Technological Innovations during the "14th Five-Year Plan" Period (Cai Guan Shui [2021] No. 23) and the Notice on the Measures for the Administration of Import Tariff Policies Supporting Scientific and Technological Innovations during the "14th Five-Year Plan" Period (Cai Guan Shui [2021] No. 24), Beijing Municipal Commerce Bureau, Beijing Municipal Finance Bureau, Beijing Customs, and Beijing Municipal Tax Service jointly formulated the Notice on the Review of Eligibility of Foreign-funded R&D Centers for Equipment Import Tariff Exemption (hereinafter referred to as "The Notice").

II. Content

The Notice mainly consists of five parts:  authorities for review, eligibility, application documents, review procedures, and supervision and management.

i. Authorities for Review

Beijing Municipal Commerce Bureau, Beijing Municipal Finance Bureau, Beijing Municipal Tax Service and Beijing Customs

ii. Eligibility

Foreign-funded R&D centers that are entitled to the preferential policies shall meet all of the following conditions:

1. R&D Investment: for independent legal entities, the total investment shall be no less than USD 8 million; for non-independent legal entities such as internal departments or branches of foreign-funded enterprises, the total R&D investment shall be no less than USD 8 million.

2. With a minimum of 80 full-time staff engaged in research and experimental development shall be at least 80.

3. The total original value of equipment purchased since the setup of the foreign-funded R&D center shall be no less than CNY 20 million.

iii. Application Documents

1. Original copy of the application form;

2. Original copy of the review form;

3. Photocopies of the last capital verification report and the audit report of the foreign-funded R&D center for the previous year;

4. Original copies of the record sheet and list of all purchased equipment of the foreign-funded R&D center and photocopies of corresponding invoices.

5. Original copy of the commitment letter stating that the purchase agreement for the imported equipment has been signed and the equipment will be delivered before the end of the year of the application.

6. Original copy of the roster of full-time staff engaged in research and experimental development at the center;

7. Original copies of the special audit reports on both the total investment in R&D and R&D expenditure of the enterprise.

iv. Review Procedures

1. The foreign-funded R&D center submits the required documents to Beijing Municipal Commerce Bureau;

2. After its acceptance and initial examination, Beijing Municipal Commerce Bureau will lead relevant departments to hold a joint review meeting;

3. For approved eligible centers, a notice shall be published jointly and the list of approved centers reported to relevant ministries and commissions for record-filing. For unapproved centers, results of the review shall be given in written form and the reasons made known to the applicants.

4. The review results shall be given within 45 working days upon acceptance of application, excluding the time for submission of supplementary documents or changed documents.

v. Supervision and Management

1. The paid tax from which the foreign-funded R&D center shall be exempted in accordance with the Notice on the Measures for the Administration of Import Tariff Policies Supporting Scientific and Technological Innovations during the "14th Five-Year Plan" Period (Cai Guan Shui [2021] No. 24) shall be refunded upon application.

2. The foreign-funded R&D center can apply to Beijing Customs and choose to forego the import VAT exemption, under which the application for import VAT exemption will be banned within 36 months thereafter.

3. The foreign-funded R&D center, in the case of alterations to the name and business scope, shall promptly report the changes to Beijing Municipal Commerce Bureau. Beijing Municipal Commerce Bureau shall verify and determine the eligibility of the centers for the preferential policies, and notify relevant departments of the results in writing.

4. The foreign-funded R&D centers shall use the duty-free imported goods properly as required. Those violating the rules to transfer, repurpose and handle the use of the imported goods, or being investigated and held criminally liable shall cease from enjoying such policies.

5. In case that the foreign-funded R&D center falsifies documents for such eligibility, Beijing Municipal Commerce Bureau shall notify Beijing Customs in writing after investigation and the center shall cease from enjoying such policies upon issuance of the letter.

III. Validity Period

From January 1, 2021 to December 31, 2025.

Tel:

8610-89150491 (Administrative Approval Service Center, Beijing Municipal Commerce Bureau);

8610-55579343 (Division of Foreign Investment Management, Beijing Municipal Commerce Bureau).

(All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.)