New Tax Rule

Notice of the State Administration of Taxation on the relevant Issues about Canceling the Examination Rights for Temporarily not Collecting Individual Income Tax Arising from Promoting the Transformation of Scientific and Technological Achievements

The State Administration of Taxation promulgated the Notice on the relevant Issues about Canceling the Examination Rights for Temporarily not Collecting Individual Income Tax Arising from Promoting the Transformation of Scientific and Technological Achievements (hereinafter, the “Notice”), which provides that from August 1, 2007, research institutions and colleges and universities may award individuals who hold positions in the research and development of the scientific and technological achievements in the form of stock rights and may immediately obtain the preferential policy of temporarily not collecting the income tax without the examination from the taxation administrative organs. However, the Notice also requires the taxation administrative organs to strengthen the management of the application of such preferential policy. If the above institutions and the award-winners fail to provide relevant materials or provide false materials and conceal the circumstances, then the award-winners must not enjoy such preferential policy.