Opinions of Hengyang Municipal People`s Government on supporting enterprises` technological transformation
(Promulgated by Decree No. 16 of Hengyang Municipal People`s Government on June 19, 2009)
To people`s governments at county, city or district level, departments under the city`s direct leadship, units of the state or Hunan province in Hengyang and all the enterprises:
 
Technical reformation enjoys salient characteristics such as new technology, less investment, short duration, quick effective response and preferable benefit, which make it an effective means to cope with crisis, improve input effect and promote stable and quick development of economy. The following suggestions are proposed to support the city`s technological transformation:

1. Whole-process commission shall be carried out for administrative approval of enterprise`s transformation projects. A commission system shall be established for enterprise`s technological transformation projects to carry out whole-process commission on administrative approvals of environmental protection, land, planning and other related matters for the investment projects of technological reformation.
After the acceptance of project application of technological reformation, the Government Affairs Center should appoint particular agency sectors to organize departments of environmental protection, land, planning, water conservancy and forestry etc. to conduct projects examination  and implement "one-site" examination or approval for project land use, planning, and environmental impact assessment.
    
2. Enterprises` investment autonomy in technological transformation shall be implemented. Technological transformation projects constructed without investment from government funds should be approved and registered by Municipal Economic Committee according to particular circumstances.
        
3. Enterprises are allowed to deduct the VAT contained in the newly acquired equipments, and the VAT rates of small-scale taxpayers is reduced to 3%.
   
4. Implement additional deduction policy on research and development expenses. For research and development expenses which is counted in current profit and loss but has not been transformed into intangible assets yet, apart from the deduction in accordance with particular provisions, 50% of the actual cost value is allowed to be deducted directly from the payable tax of that year. If the research and development costs have been transformed into intangible assets, a pre-tax amortization of 150% of the intangible assets costs will be conducted.
   
5. Implement the policy of accelerated depreciation of fixed assets and pre-tax deduction of fixed assets overhaul expenses. For those enterprises accelerated depreciation is required because of progress in technology and fast product replacement, they are allowed to shorten the depreciation year or adapt accelerated depreciation method.
If the repair expenses of fixed assets amount to 50% of the tax base in the time the fixed assets was purchased, and its service life is extended more than two years after the repair, the taxable income can be amortized in accordance with the remaining service life of the fixed assets.
   
6. Carry out tax credit policy on the purchase of environmental protection or energy saving equipments. If a enterprise has purchased and actually used particular equipments specified by the state for environmental protection, energy and water saving and safe production etc, 10% of its investment will be offsetted from the payable tax amount of the current year. If the payable tax of the current year is not sufficient, the offset can be transmitted to the next 5 tax years.

7. carry out the policy of tax reduction and exemption for technological transformation on energy saving and greenhouse gas emissions reducing. For incomes that enterprises earned in environmental protection as well as energy and water saving projects, since the tax year that the project earns the first operation income, its income tax can be exempted from the first year to the third year, and half levied from the forth year to the sixth year.

8. Increase reduction or exemption amount of stipulated fees for technological transformation. For municipal key technological transformation projects, according to the spirit in "Notification of Hengyang Municipal People`s Government on Printing and distributing <Relief Methods for Hengyang city-level administrative fees and government funds>", city-level stipulated fees will be exempted upon approval of the municipal government.

9. actualize loan discount incentive program for key technological transformation projects. For technological transformation projects that invested over 5 million yuan in fixed assets, and started construction after January 1, 2009, their interests occurred due to corporate loans from financial institutions which is used in the investment of technological transformation equipments can be discounted proportionally by government finance after the project implementation is audited by the municipal economic committee, municipal financial and auditing departments and approved by the municipal government.  
Downtown enterprises can get 100% discount of the actual interest in the current year from the municipal finance, county enterprises can get 30% discount of the actual interest in the current year from the municipal finance, and70% discount of that from the county finance. The discount period is based on the actual loan time, and it can not exceed more than one year. The maximum discount amount of one project is 1 million yuan.

10. Give prior guarantee to land for enterprises` technological transformation projects. Land departments must ensure construction lands for major transformation projects; for those projects whose land needs cannot be satisfied, agricultural land,conversion quota reserved by provincial government can be applied for. Vigorously promote land saving and encourage construction of multi-story standard factory buildings; encourage technological transformation with existing sites and revitalization of stock industrial land with measures like plant conversion; and promote intensive land use through technological transformation.

11. Lay stress on special declaration of national or provincial enterprises` technological transformation. Strengthen the convergence reports with national and provincial departments concerned and strive for special financial assistance for national and provincial technological transformation projects.
   
12. Strengthen the organization and leading of enterprises` technological transformation. Set up the city`s leading group of technological transformation, research and solve as a whole major problems in enterprises` technological transformation, examine and approve the government`s discount amount for loan of the technological transformation, and supervise and urge the implementation of related policies.

13. These opinions will goes into effect as of the date of promulgation.