On Tuesday 26 November, the Ministry of Finance (MOF), the Ministry of Commerce (MOFCOM) and the State Administration of Taxation (SAT) issued the Notice on continuing to Implement the VAT policy for equipment purchased by R&D structures (Notice n. 91 of 2019). The policy consists of a VAT refund granted to R&D structures, both domestic and foreign-invested, that purchase domestically produced equipment and instruments for their research and development activities; its aim is to encourage R&D entities to purchase more Made in China products.
The notice specified the requirements that relevant entities must meet in order to qualify as “R&D structures”. For foreign-invested ones, these include: registration date; legal structure and personality; registered capital; amount of annual R&D expenses; size of R&D workforce; and registration as ‘R&D structure’ within commerce and business administration supervising bodies.
The notice also includes a detailed list of equipment and instruments that, if manufactured domestically, will be eligible for VAT refund.
The policy will apply to the period between 1 January 2019 and 31 December 2020. It is a continuation of the previous Notice on continuing to Implement the VAT policy for equipment purchased by R&D structures issued in 2016 by MOF, MOFCOM and SAT (Cai Shui  n. 121).