China Tax/Business News Flash

Jul 2017, Issue 26

Pudong released the measures of financial subsidy during the 13th Five-year period aiming to accelerate headquarters economy, industry growth and talent innovation 

Shanghai Pudong New Area, which shoulders the important mission of China’s reform on opening-up, has also recently been given the responsibilities of developing the Shanghai Pilot Free Trade Zone (SH PFTZ) and the core functional area of the science and technology innovation centre. As such, industry incentive policies in Pudong have always been attracting close attention of a wide range of enterprises and investors. In February 2016, the government of Pudong New Area (the “Pudong Government”) issued the 13th Five-year Plan on the National Economic and Social Development of Pudong New Area (the “13th Five-year Plan for Pudong”) to enhance the financial subsidy mechanism so as to promote structural modifications in industries, improve the efficiency of the area’s resource allocation and foster innovative talents. In February 2017, the Opinions on the Financial Support for Economic Development in Pudong New Area During the 13th Five-year Period (Pufu [2017] No.18, hereinafter referred to as the “Opinions”) was released to set forth the basic principles, key support areas and administrative rules for the provision of such financial support.

Recently, the Pudong Government promulgated a series of measures for financial support during the 13th Five-year period (hereinafter referred to as the “13th Five-year Financial Support Measures in Pudong” or the “Measures”), which cover headquarters economy, buildings economy, innovative talents and numerous sectors (including financial service, professional service, shipping, commerce and trade industry, strategic emerging industry and old age care service). These Measures basically extended and adjusted the financial support measures provided during the 12th Five-year period. In terms of the scope of benefit recipients, the Measures newly added specific financial support for buildings economy and innovative talents. In terms of the extent of support, most measures still followed the wording of “granting certain subsidies” without giving any specific amount. The Measures will take effect till 31 December 20202 and the relevant financial support are provided retrospectively from 1 January 2016.

In this China Tax and Business News Flash, we will introduce the major contents of the 13th Five-year Financial Support Measures in Pudong and share with you our observations.

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