• Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 7/16/2013

China - Nationwide inspection of hi-tech enterprises  

July 16: Chinese government agencies have launched a program for inspection of high technology (hi-tech) enterprises.

The related guidance (Guokefahuo [2012] No. 1220)—known in English as the “notice on launching of inspection of high-new technology enterprises”—was jointly issued by China’s Ministry of Science and Technology, the Ministry of Finance, and the State Administration of Taxation in early 2013.

The inspection is divided into two parts—a self-inspection and an independent inspection. The period for self-inspection was from 1 January 2013 to 30 April 2013. Now, a government agency working group will conduct inspections based on the results of the self-inspections. The sample ratio will be 20% to 30%.

KPMG observation

This new inspection program will be the broadest and most rigorous inspection since the issuance of certain administration measures for hi-tech enterprises in 2008. All hi-tech enterprises—whether or not they are subject to inspection—need to consider conducting a comprehensive self-inspection.

Enterprises that are preparing to apply for “high new technology enterprise” (HNTE) status, but have not yet obtained a HNTE certificate, need to conduct an internal evaluation according to the key scope of this inspection and build up and enhance their R&D activity management systems.

Read a July 2013 report [PDF 388 KB] prepared by the KPMG member firm in China: Nationwide inspection of hi-tech enterprises

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