A Shanghai FIE is headquartered in the United States, engaging in the production and sales of automation equipment. At the beginning of this year, the financial manager of A foreign company heard that the local government has a financial support policy that subsidizes the local contribution amount of the company last year, so he applied on his own. However, due to the small amount of tax paid by A foreign company last year, it only received a subsidy of RMB 240,000.
Later, when the headquarter of A foreign company entrusted Dongjin with the internal audit, Dongjin found that A foreign company invested in a new production line early last year to upgrade its products and started producing new AI products. After studying and communicating with relevant departments, Dongjin confirmed that the new AI product belongs to the key industries and products encouraged by Shanghai. According to relevant policies, A foreign company can receive a special financial subsidy of at least RMB 1,500,000.
Unfortunately, the financial manager of A foreign company does not understand the above preferential policies. Given that A foreign company has already received local financial subsidies, due to the fact that A foreign company cannot double apply for and enjoy the financial subsidy policies, A foreign company has lost the opportunity to apply for the RMB 1,500,000 special financial subsidies.
Due to the complexity and variety of fiscal and tax preferential policies, it is often difficult for companies to grasp them, resulting in not selecting the best solution when applying for financial subsidies. It is often the case that they pick up sesame seeds but lose watermelons.
Dongjin recommends that companies conduct comprehensive research, analysis, and comparison before applying for fiscal and tax preferential policies.
If you need professional advice from Dongjin, please feel free to contact us.