The State Administration of Taxation (SAT) issued on 21 April 2010 a ruling clarifying the treatment of tax incentives for a qualified High-New Technology Enterprise (HNTE) in the transitional period (Guo Shui Han [2010] No 157). The content of the ruling is summarized below.
A qualified HNTE, which is entitled to (i) tax exemption in the first 2 years plus 50% reduction in the following 3 years, or (ii) tax exemption in the first 5 years plus 50% reduction in t…