Income Tax Preferential Policy Effectiveness Of Inciting China’s High-tech Enterprises R&D Input

Science and technology has become the decisive power in the development ofsocial economy, and the important sign of comprehensive national power of a countryin21stcentury. In the face of opportunities and challenges which brought by newrevolution in science and technology, the development of high-tech industry andimprovement the independent creative ability of science and technology has become theimportant strategies in the period of economic transformation into our country.High-tech industry has become the backbone of promoting economic growth of China,enhancing industrial competition ability and constructing innovation country. So how todevelop high-tech industry has become the focus of attention of the parties. While,taxation, as an important match of government in macroeconomic regulation, has beenwidely adopted by many countries as the incentive policy to influence the developmentof high-tech industry. since1980, our country has already come on many taxpreferential policy to incentive new hi-tech industry development. Especially in2008the new income tax law implementation to high-yield technology industry developmentbrought new opportunity. In this context, a comprehensive in-depth study of preferentialtax policy, has important theory significance and the practical significance on perfectingthe tax incentive policy and improving tax policy incentive effect.This paper has reviewed and summarized the theoretical research and empiricalresearch of the relevant high-tech enterprise R&D preferential tax policies. And then,firstly, introduced high-tech R&D input tax incentive theories. Secondly, introducedforeign mature capital cost analysis method, established the user cost of capital modelto calculate the user cost of capital of individual companies. Thirdly, analyzed thecurrent situation of Chinese high-tech enterprises R&D input and existed preferentialtax policies of supporting high-tech enterprises R&D investment. On the basis ofempirical model, we used the high-tech industry data during2006-2010in stock marketto analyze. Then we concluded that government provided preferential income tax thatthe company reduced by1%each time the user cost of capital, may have caused its3.32%increase in R&D put into effect. Fourthly, compared tax incentive policy ofcountry with that in foreign typical innovative countries to learn about their advancedexperience. Finally, on the basis of empirical research, we gave advice on how toperfect preferential tax policies to improve the high-tech enterprises R&D investment.The main contribution of this paper lies in:(1) doing empirical analysis, based onthe existing model qualitative analysis, to make up insufficient for pure theoreticalanalysis and empirical research;(2) Introducing foreign mature user cost of capital instead of a lot of research income tax rate, tax intensity, empirical study compensatesfor these variables cannot be more accurate characterization of our corporate tax burdenof defects;(3) Study found that, the company reduced user cost by1%each time, R&Dincreased by3.32%.