Zhuhai-based Gree Electric Appliances, the world’s biggest maker of home air conditioners, plans to plough into research and development the RMB5.3 billion (US$790 million) it got to keep last year thanks to China’s tax cuts, reports Caixin Global.
The money saved will be spent on core technologies, according to Dong Mingzhu, chairwoman of the company.
China started replacing business tax with VAT in 2016. Last May, it cut the 17 percent and 11 percent VAT rates to 16 percent and 10 percent, respectively, and dropped them further for many sectors, including manufacturing, from 16 percent to 13 percent this April.
The government’s tax policy includes the deduction of R&D expenses and tax incentives for high-tech enterprises to help support innovation. In the past three years that saved Gree CNY5.8 billion, Dong said.