In 2024, the implied tax subsidy rate on R&D expenditures for loss-making SMEs in China is forecasted to remain constant at 13%, the same value anticipated from 2025 to 2028. In 2023, the actual rate was similarly 13%, indicating stability with no year-on-year variation expected from the previous year. The five-year compound annual growth rate (CAGR) suggests no change as the implied tax subsidy rate is expected to consistently remain at this level through 2028.
Future trends to watch for:
- Sustained government support policies could ensure these rates remain stable, but watch for regulatory changes that might alter fiscal incentives for SMEs.
- Global economic shifts and domestic growth could influence adjustments in tax policy, potentially impacting SME financial health and R&D investment levels.
