Answers to the Relevant Rules and Precautions for the Registration of Technology Contracts in Liaoning Province

I. What is a technology contract?

1. Technology development

2. Technology transfer

3. Technology licensing

4. Technology consultation

5. Technology service

II. What policies can be enjoyed through the identification of technology contracts?

1. Value - added tax preferential policy

   Income obtained by units and individuals from engaging in technology transfer, technology development, and related technology consultation and technology service businesses is exempt from value - added tax.

2. Income tax preferential policy

   For eligible technology transfer income, the part not exceeding 5 million yuan is exempt from enterprise income tax, and the part exceeding 5 million yuan is subject to enterprise income tax at a reduced rate of 50%.

3. R & D expense additional deduction (for the buyer)

   According to the "Notice on Increasing the Pre - tax Additional Deduction Ratio of Research and Development Expenses of Science and Technology - based Small and Medium - sized Enterprises" (Caishui [2017] No. 34), additional deductions for R & D expenses are allowed. For R & D expenses actually incurred by an enterprise in carrying out R & D activities, if they are not formed into intangible assets and are included in the current profit and loss, on the basis of making deductions in accordance with regulations, 75% of the actual amount incurred in the current year shall be deducted from the taxable income of the current year; if they are formed into intangible assets, they shall be amortized before tax at 175% of the cost of the intangible assets.

III. Question - and - answer section

1. How to define and apply for tax exemption for related - party transactions?

   Answer: For related - party transactions with a 100% equity stake, whether it is direct or indirect holding, only value - added tax can be exempted, and income tax cannot be exempted.

2. Can the transfer of patent application rights be exempted from income tax?

   Answer: No. Because the intellectual property rights have not been obtained yet, it is regarded as the transfer of technical secrets.

3. Can a technology contract signed between two different companies with the same legal representative be registered?

   Answer: Yes. The legal representative refers to an individual. Even if the legal representative holds 100% of the shares of the two companies, the transactions between the two companies do not belong to related - party transactions because there is no equity relationship between the two companies.

4. In a technology development contract, Party A entrusts Party B, and Party B entrusts Party C. Can it be registered?

   Answer: Yes. Both entrustment processes can be registered and are exempt from tax. Because it is the technology development act itself that enjoys the tax - exemption policy.

5. If a technical secret transfer contract contains multiple patents, can it be exempted from income tax?

   Answer: No. Only the policies for the transfer of technical secrets can be implemented.

6. For technology transfer fees + annual commissions, can the commission part be tax - exempt?

   Answer: Yes.

7. For a cooperative development contract with joint investment and joint research and development, how to register?

   Answer: Check whether the contract involves capital transactions. If there are capital transactions, register as normal, and the party paying the money is regarded as the seller. If there is no capital transaction involved, no registration is required.