Recently, the legislative body in Shandong province approved the "Regulations for Promoting Intellectual Property in Shandong Province" (hereinafter referred to as the "Regulations"). The Regulations clearly provide for several measures to encourage and support the creation and use of intellectual property. It is encouraged that IP can be assessed and account for a maximum of 70% of the registered capital.
According to the Regulations, special funds of yearly increase should be arranged in the governmental financial budget to be used for the creation, use and protection of IP. Furthermore, loans or risk investment should be subsidized in the commercialization of independently-developed IP.
As for the taxation, the Regulations also provide that normal taxpayers can benefit from the tax rebate if they are selling the independently-developed IP products such as the compute r software, integrated circuit. For entities, tax exemption or tax deduction should also apply if the income is obtained from the transfer independently-developed technology such as patent, plant varieties, computer software, layout desing of integrated circuit, technical know-how.
Besides, the Regulations also prescribe that, in one tax year, where the income does not exceed 5 million RMB from the technology transfer; the enterprise should be exempt from the income tax. Where the technology transfer produces more than 5 million RMB, the income tax should be levied in half. If IP is to be invested as a share, the share should be at most 70% of the registered capital.
