Preferential tax policies for technology companies

Legal analysis: (1) If a company-based venture capital enterprise directly invests in a seed stage or a start-up stage technology-based enterprise (hereinafter referred to as the start-up stage technology-based enterprise) for two years (24 months, the same below), the taxable income of the company-based venture capital enterprise can be deducted in the year when it holds the equity for two years. If the deduction is insufficient in the current year, it can be carried forward in future tax years.

(2) If a limited partnership venture capital enterprise (hereinafter referred to as a partnership venture capital enterprise) has directly invested in a start-up science and technology enterprise for two years by means of equity investment, the partners of the partnership venture capital enterprise shall handle it in the following ways:

1. The legal person partner can deduct the income of the legal person partner from the partnership venture capital enterprise according to 70% of the investment in the start-up technology-based enterprise; If the deduction is insufficient in the current year, it can be carried forward in future tax years.

2. Individual partners can deduct the operating income of individual partners from the partnership venture capital enterprise according to 70% of the investment in start-up technology-based enterprises; If the deduction is insufficient in the current year, it can be carried forward in future tax years.

(3) If an angel investor directly invests in a start-up technology-based enterprise by way of equity investment for two years, the taxable income obtained by transferring the equity of the start-up technology-based enterprise can be deducted by 70% of the investment amount; If the current deduction is insufficient, it can be carried forward for deduction when the taxable income of equity transfer of start-up technology-based enterprises is obtained in the future.

If an angel investor invests in a number of start-up technology-based enterprises, and 70% of the investment in the start-up technology-based enterprises that have been cancelled and liquidated has not been fully deducted, the taxable income obtained by the angel investor from transferring the equity of other start-up technology-based enterprises can be deducted within 36 months from the date of cancellation and liquidation.

Legal basis: Notice on individual tax policies for venture capital enterprises and angel investment. If a company-based venture capital enterprise directly invests in seed-stage and start-up technology-based enterprises by means of equity investment for two years, the taxable income of the company-based venture capital enterprise can be deducted by 70% of the investment amount in the year when it holds equity for two years.