Provisional Regulations of the State Council on Technology Transfer

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Provisional Regulations of the State Council on Technology Transfer

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Provisional Regulations of the State Council on Technology Transfer

更新时间：2007-5-2

1985.01.10
STATE COUNCIL OF CHINA
PROVISIONAL REGULATIONS OF THE STATE COUNCIL ON TECHNOLOGY TRANSFER
(Promulgated 10 January 1985 by the State Council)
　These　 Regulations　concerning　technology transfer are formulated in
order　to　arouse　 the　enthusiasm,　initiative and creativity of staff
and　workers,　in particular　scientific　and　technical　personnel,　to
bring　about　the　rapid　application　 of　 scientific　 and　technical
research　 results　 and　 knowhow　to　material　 production,　 and　to
effectively　implement　the　policies　of economic construction　reliant
on　 science　 and　technology　and　of　the　orientation of science and
technology to economic construction.
(1) Technical Commodities and the Technology Market
　In　 the　context　of　the　socialist　commodity economy,technology is
also　a commodity.　Units　and　individuals　may all transfer technology
free　 of　the　restrictions　 of　regional,　departmental　or　economic
structure.　The　State　has decided　to　open wide the technology marked
and　to　promote　a flourishing of technology trade, in order to promote
the development of production.
　With　regard　to　any　technology which assists the development of new
products,　which　 raises　 product　 quality,　 reduces　product　cost,
improves　operational　management　 or　 leads　 to　increased　economic
benefit,　 the　transferor　and　transferee　may　engage　in　technology
transfer　　in　　accordance　　with　　the　principles　 of　 voluntary
participation　　 and　　 mutual　　 benefit　 and　 agreement　 through
consultation.　 Technology　 which　 violates　 State　 Law,　policy　or
regulations　 shall　 not　be　transferred.　The　transfer of technology
which　involves　 national　security　or the confidentiality of which is
demanded　by　the　 greater　 economic　interest,　shall　be　handled in
accordance with the relevant State regulations.
(2) Technology Transfer Fees
　A　 technology　 transfer　 fee　 refers　to　the price for an item of
technology,　following　 adjustment　in　the marked and consultation and
agreement　between　the　two　parties.　It　may　be　calculated　as　one
lump　 sum,　 as　a　fixed　percentage　 of　 increased sales or profits
resulting　from　the　implementation of　the　particular　technology, or
calculated by another method agreed upon by the two parties.
　With　 the　 consultation　 and　agreement　of　the　relevant　parties
to　 the　technology　 transfer,　 an　intermediary (including a unit or
individual)　who　facilitates　 trade　in　an　item　of　technology　may
receive　a reasonable remuneration.
(3) Technology Transfer Contracts
　For　 the　 transfer　 of　 technology,　 the　parties　shall　sign　a
technology　transfer　 contract　 which　 conforms　 to　 the　"Economic
Contract　Law　of　the　People's　Republic　of　China"　and the relevant
provisions of other laws.
　The　following　items　shall　be　clarified in the contract

by the two
parties:
　(i)　 whether　the　parties　each　require　to　be　informed in detail
of any ongoing improvements to the technology in question;
　(ii) whether the technology may be transferred to a third party;
　(iii)　 standards　and　method　for　acceptance　of　the　transferred
technology; and
　(iv)　 whether　pre-payment　of a fee for instruction in the rudiments
of the technology is demanded.
(4) Rights and Interests in Technology Transfer
　Technology　 used　 in research and development under the plans of the
Sate　or　those　 of　 a　 relevant　 high　 level　 authority　may,　in
addition　 to being disseminated　for application in accordance with the
provisions　of　the　plan,　be　 transferred　in　accordance　with these
Regulations　by　the unit responsible for　the　technology.　Income from
such　 transfers　 shall　belong　to　that　unit.　Personnel　　directly
involved　 in　 the　 research　 and　development　of　the technology in
question shall be rewarded.
　Income　 derived　 from　the　transfer　of　technology　resulting from
research　and　development　 carried　out under the plan of a particular
unit　shall　belong　to that　unit.　Personnel　directly involved in the
research　and　development　of　the　 technology　 in　question shall be
rewarded.　 Personnel　 who　 contribute　by　initiating　 research　and
development　project　proposals in response to marked demands,　and　who
actively　work　to complete them, shall be rewarded more liberally.
　Personnel　 who　 contribute　 by　 assisting　 the　transferee　in　a
technology　transfer　to fully grasp the transferred technology shall be
rewarded　 in　 the　 same　 way　 as　 those　 personnel　who　directly
participate in the research and development of the technology.
　Providing　　they　 perform　 their　 own　 job　 well　 and　 do　not
violate　 the　technological　 rights　 or　interests　of　the unit, the
income　derived　from　the　transfer　 of　 technology　 resulting　from
individual　research　and　development　by　personnel　may　be　returned
to　 those　personnel　or　to　the team. If materials　or　equipment　of
the　unit　were　used,　a fee for use shall be paid in　accordance　with
the　 prior　 agreement　with　the　unit. The rights and interests　with
regard　to　technology　researched　and　developed　on　commission　from
another　unit　shall be handled in accordance with the provisions of the
commission contract.
(5) Payment of Technology Transfer Fees
　Lump　 sum　technology transfer fees paid by units under the ownership
of　the　whole　 people or by collectively owned units shall be paid out
of　management　fees　 and,　 where　the　amount　is　relatively　large,
may　 be　amortised　by　instalments.　 Where　 the　 fee　 comprises　a
percentage　of　increased sales or profit,　it　shall　be　paid　out　of
the　 increased　 pre-tax　 profit　after　the　implementation　 of　the
technology.　In　the　case　of a unit under the ownership of　

the　whole
people,　it　shall be paid out of the cash surplus of operating expenses
or　out　of　extra-budgetary income. In the absence of a cash surplus of
operating expenses or of extra-budgetary income, it shall be paid out of
operating expenses.
(6) Taxation of Technology Transfer
　Where　the　total net annual income from technology transfer of a unit
under　the　 ownership　 of　the whole people or of a collectively owned
unit　does　not exceed　100,000　yuan,　it　shall　be exempt from income
tax,　and　the entire amount　retained　by　the　unit.　Where the amount
exceeds　100,000 yuan, the excess　amount　shall　be taxed in accordance
with　the law. Major specialist institutes,　scientific　research　units
and　other　units　under the ownership of　the　whole　people　shall　be
exempt　for　three　years　from　income　tax　on　income　 derived　from
technology　 transfer,　and the entire amount shall be retained　by　the
unit　 for　 use　in　the development of scientific research. Individual
income tax in accordance with the law.
(7) Use of Income from Technology Transfer
　The　 use　of　income　from　technology　transfer which is retained by
a　unit shall　be　determined　by　the unit itself. Its use shall not be
directed　 or　restricted　by　a　higher　authority　or　other　relevant
department.
　Units　 engaged　 in　 technology　 transfer　shall deduct five to ten
percent　of　their　　net　 retained　income　from　technology　transfer
for　 the　 rewards　stipulated　under　Article　4.　Distribution　shall
be　 supervised　 by　the responsible　person　for the project and shall
not　be　interfered　with　by　the　unit　　itself　 or　other　relevant
departments.　 This　 cost　 shall　 not　 be　calculated as part of the
unit's total bonus.

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