Notice Of The Ministry Of Finance On Tax Policies Concerning Venture Capital Enterprises And Angels Investing In Individuals

　 　 Notice on tax policies of venture capital enterprises and angels investing in individuals

　 A kind of A kind of A kind of 　 Fiscal [2018] 55 A kind of A kind of A kind of

The financial offices (bureaus), the state taxation bureaus and the local taxation bureaus of all provinces, autonomous regions, municipalities directly under the central government and cities under separate planning shall be the financial bureaus of the Xinjiang production and Construction Corps.

To further support the development of venture capital, we hereby notify you of the tax policy issues of venture capital enterprises and angel investment individuals as follows:

I. tax policy contents

(1) a company based venture capital enterprise directly invests in the seed investment period and the newly established science and technology enterprise (hereinafter referred to as the start-up technology enterprise) for 2 years (24 months, the same below). It may deduct the taxable income of the venture capital enterprise of the company in accordance with the 70% of the investment amount in the year when the stock ownership has been held for 2 years.

(two) a limited partnership venture capital enterprise (hereinafter referred to as a partnership venture capital) directly invested in a start-up technology enterprise for 2 years by equity investment, and the partners of the venture capital enterprise shall be treated as follows:

1. a legal partner may deduct the income of a legal partner from a partnership venture capital company in accordance with 70% of the investment amount of the start-up technology enterprise, and the deductible deduction can be deducted in the next tax year.

The 2. partners can deduct 70% of the profits from the partnership venture capital enterprises in accordance with the investment amount of the start-ups, and those that are not deductible in the current year can be deducted in the next tax year.

(three) angel investors who invest directly in start-ups in the form of equity investment for 2 years can deduct the amount of taxable income obtained from the equity of the start-ups in accordance with 70% of the investment amount. If the current shortage is deducted, the taxable income of the equity of the start-up technology enterprise can be deducted and deducted later.

Angels invest in a number of start-ups who invest in individuals, and for those start-ups who have gone through the cancellation of liquidation, the 70% of their investment has not been deducted by the angel investment individuals. They can deduct the taxable income earned by the angel investment individuals in spanferring the equity of other start-ups within 36 months from the date of cancellation.

　　 Two, relevant policy conditions

(1) start-ups in this notice shall also meet the following requirements:

1. a resident enterprise registered and established in China (excluding HK, Macao and Taiwan).

2. when accepting investment, the number of employees is not more than 200, among whom the number of employees with a bachelor's degree or above is not less than 30%, and the total assets and annual sales income are not more than 30 million yuan.

3. when the investment is received, the establishment time shall not exceed 5 years (60 months).

4., it will not be listed on domestic and foreign stock exchanges within 2 years after accepting investment and after receiving investment.

5. the proportion of R & D expenditure to cost expenditure will not be less than 20% in the year of investment and the next tax year.

(two) a venture capital enterprise enjoying the tax policy stipulated in this Circular shall also meet the following requirements:

1. in the territory of China (excluding Hong Kong, Macao and Taiwan), a resident enterprise or partnership venture capital company, which is registered and implemented, shall not be a sponsor of a newly established investment oriented technology enterprise.

2. in line with the provisions of the Interim Measures for the management of venture capital enterprises (thirty-ninth of the 10 departments of the development and Reform Commission) or the special regulations on the supervision and management of private investment funds (Commission No. 105th) concerning the venture capital fund, the record shall be completed and standardized according to the above provisions.

3. within 2 years after the investment, the proportion of the equity of the venture capital enterprise and its related parties holding the invested start-ups should be less than 50%.

(three) an angel investing individual enjoying the tax policy stipulated in this notice shall also meet the following requirements:

1., it does not belong to the initiators, employees or their relatives (including spouses, parents, children, grandparents, grandparents, Sun Zinv, grandchildren, siblings, the same below) who are invested in start-ups.

2. within 2 years after the investment, the proportion of equity that I and my relative hold in the newly established technology enterprise should be less than 50%.

(four) the investment that enjoys the tax policy stipulated in this notice is limited to the equity investment acquired through direct payment of cash to the invested start-up technology enterprise, excluding the stock ownership of other shareholders.

Three. Management matters and management requirements

(1) the caliber of R & D expenses as mentioned in this notice shall be implemented in accordance with the provisions of the Ministry of Finance and the State Administration of Taxation of the Ministry of Finance and taxation of the Ministry of science and technology of the Ministry of Finance on the improvement of the pre Tax Deduction Policy for research and development expenses (fiscal [2015] 119).

(two) the number of employees mentioned in this Notice includes staff and workers who have established labor relations with enterprises and labor dispatch personnel accepted by enterprises. The number of employees and total assets is calculated according to the average of 12 consecutive months before the investment is accepted, and the average number of employees who are less than 12 months is calculated on the basis of the actual number of months.

The sales revenue mentioned in this Notice includes the income from main business and other business income. The annual sales income index shall be calculated according to the cumulative number of 12 consecutive months before the investment and less than 12 months.

The cost mentioned in this Notice includes main business costs, other business costs, sales expenses, administrative expenses and financial expenses.

(three) the amount of investment as mentioned in this notice shall be determined according to the paid investment amount of the start-up technology enterprise according to the venture capital enterprise or the angel investment individual.

The investment amount of partners in venture capital ventures to start-ups is determined according to the proportion of investment paid by venture capital companies to start-ups and the proportion of partners invested in partnership ventures by partnership agreement. The partners' income derived from partnership venture capital enterprises is calculated according to the regulations of the Ministry of Finance and the State Administration of Taxation on the issue of income tax on partnership partners (fiscal [2008] 159).

(four) angel investment individuals, corporate venture capital companies, partnership venture capital companies, partnership venture capital partners and investment start-ups should handle preferential procedures according to the regulations.

(five) when a newly established science and technology enterprise accepts angel investment for personal investment for 2 years, when the angel invests in spanferring shares of the enterprise on the Shanghai stock exchange and the Shenzhen stock exchange, the amount of investment that has not been deducted is calculated and deducted at the time of liquidation of the tax in accordance with the relevant provisions of the current restricted stock.

(six) taxpayers who enjoy the tax policy stipulated in this Circular shall be spanferred to the competent tax authorities of the invested enterprises if the competent tax authorities disagree with whether the invested enterprises are in line with the conditions of start-ups. Those who provide false information to taxpayers and enjoy tax policies illegally shall be dealt with according to the relevant provisions of the tax collection and administration law, and be included in the list of dishonest taxpayers, and the Joint Disciplinary Measures shall be implemented according to the provisions.

Four, execution time

The policy of angel investment personal income tax stipulated in this notice shall be implemented from July 1, 2018, and all other policies shall be implemented from January 1, 2018. The investment that occurs within 2 years before the date of execution will be invested for 2 years after the date of execution and comply with the other conditions stipulated in this notice. The tax policy stipulated in this notice may apply.

The Circular of the Ministry of finance, the General Administration of Taxation and the General Administration of Taxation on the pilot policy on tax revenue for venture capital enterprises and angel investment individuals (fiscal 2017 [38]) has been repealed since July 1, 2018, and the amount of investment that meets the requirements of the pilot policy can continue to be deducted according to the provisions of this circular.

Tax administration of the Ministry of Finance

May 14, 2018