Applications for Technology Advanced Service Enterprise (TASE) Status in Shanghai

Together with the High- and New-Technology Enterprise (HNTE) status, the Technology Advanced Service Enterprise (TASE) status is a core innovation tax policy in China.

TASE is a status given to enterprises which, independently or through subcontractors, have signed outsourcing services agreements with overseas entity, for the provision of Information Technology Outsourcing (ITO), Business Process Outsourcing (BPO), or Knowledge Process Outsourcing (KPO) services, as prescribed in a detailed list of qualifying services attached to the Measures.

Being recognised with TASE status grants:

Corporate Income Tax (CIT) rate reduction to 15%, from the statutory 25% rate;
Expenditure for the training and education of personnel, are deductible from their individual taxable income for a maximum of 8% of the personnel’s salary amount (compared to the 2.5% statutory rate); the part exceeding 8% can be deducted in the next fiscal year.

Requirements

Enterprise with legal personality in Shanghai
Be operating in one or more technology services included in an Annex appended to the Measures. Income in these services should exceed 50% of the enterprise’s income, while the income from overseas outsourcing services should exceed 35% of the enterprise’s annual income in that yea
Over 50% of the staff should possess at least an associate college degree.

Date of publication

25 June 2020

Application period

24 June - 30 September

Applications for TASE status are managed at the municipal-level. Applications are first submitted online and then to district-level S&T bureaus where the applicant is located; after a first screening, eligible applications are then forwarded to the responsible office at the municipal level; applications are finally evaluated through peer review: the lists of approved TASEs will be disclosed online on the website of the Shanghai S&T Commission.

International participation: opportunities and figures

The TASE status is perceived to be easier to obtain for foreign-invested enterprises, as it does not require the enterprise to own local IP rights of the key technologies representing the enterprise’s core products or services (unlike HNTE status). This is confirmed by very high percentages of foreign-invested enterprises, - especially wholly foreign-owned enterprises - selected every year, not only in Shanghai but also in other areas in China.