Research and Development Cash Rebate Scheme

The Scheme

1. The Research and Development Cash Rebate Scheme (the Scheme) aims to reinforce the research culture among business enterprises and encourage them to establish stronger partnership with local public research institutions. The Scheme is administered by the Innovation and Technology Commission (ITC).

Eligibility

1. To encourage companies to invest more in research and development (R&D), the Scheme provides a cash rebate equivalent to 30% (Note) of a company’s expenditure in two types of applied R&D projects -

    

   1. Innovation and Technology Fund (ITF) projects
      R&D projects funded by the ITF; and
      
      
   2. Partnership projects
      R&D projects funded entirely by companies and conducted in partnership with designated local research institutions.

       

   Note : The level of cash rebate has been revised from 10% to 30% effective from 1 February 2012 and is applicable to applications approved on or after that date.

1. Please visit http://www.itc.gov.hk/en/funding/itf.htm for details of the funding schemes under ITF and the administration of ITF projects. For Partnership projects, the following types of work or activities will not be eligible for cash rebate under the Scheme -

1.  
   1. product enhancement/customization and related work, conventional operation or/and business activities without research content, such as product design and general system automation;
      
   2. companies’ in-house R&D work; and
      
   3. research projects outside the science and technology fields such as market research and management studies.
      

1. The designated local research institutions include -
   
   
   1. local universities;
   2. R&D Centres set up under the ITF;
   3. Hong Kong Productivity Council; and
   4. Vocational Training Council.

Details of the designated institutions are in paragraph 22 below.

Application and Payment Procedures

1. Application for cash rebate under the Scheme should be submitted in the form of hard copy by the company concerned to ITC by post or in person. The research institution or other parties cannot submit application on its behalf.

1. Companies’ contributions to ITF projects broadly fall into two categories -
   
   
   1. under an ITF platform project, the company (together with other industry partners) will contribute at least 10% of the project estimate (and the contributions are normally required to be paid upfront); and
      
      
   2. under an ITF collaborative project, the company and ITF will each contribute 50% of the R&D project cost, and the contributions are paid to meet project expenditure on a matching basis (i.e. the company is not required to pay its entire contribution upfront).

1. For an ITF platform project, a company can submit cash rebate application (Form A(I)) upon full payment of its pledged contributions to the project. 

    

1. For an ITF collaborative project, the cash rebate is disbursed to a company in two phases.  The company can submit an application for the interim payment of cash rebate (Form A(I)) when the project expenditure has exceeded 50% of the project estimate.  It can submit an application for the final payment upon project completion.  The interim payment of cash rebate will normally be calculated on the basis of 50% of the project estimate, and the final payment will be based on the finalized project accounts.

    

1. All ITF projects approved by ITC on or after 1 April 2009 are eligible for cash rebate under the Scheme.

    

1. The following flowchart illustrates the two categories of cash rebate applications under ITF projects -

Partnership projects

1. Partnership projects refer to applied R&D projects which are funded entirely by companies and undertaken by the designated local research institutions.  Information on the designated research institutions is set out in paragraph 22 below.  To be eligible for cash rebate under a Partnership project, a company must first pre-register its project proposal with ITC before commencing the R&D work (Form B(I)) and provide the following details -

    

   
   
   1. company information (with a photocopy of the valid Business Registration (BR) Certificate);
   2. brief description of the purpose and the scope of the R&D project; and
   3. the designated research institution engaged by the company and the contact person.

       

   The project pre-registration exercise will take place from 1 April 2010 onwards.  Project pre-registration should not be taken as prior approval of ITC for cash rebate application.  The company or the research institution is not required to seek ITC’s endorsement of modifications to the project proposal before the company submits application for cash rebate.  ITC will liaise with the research institutions on details of the R&D projects where necessary.

    

1. Applications for cash rebate (Form B(II)) should be supported by reports from the designated research institutions to certify that -
   
   
   1. the scope of the applicant’s project is an applied R&D project in accordance with the scope of the Scheme as set out in paragraph 2 above; and
   2. the financial payment by the company is in order.
      
      
   Cash rebate application forms, Partnership project pre-registration form and a template for the interim or final project report by the research institution are available at http://crs.itc.gov.hk.

    

1. Similar to ITF projects, project expenditure which is essential and necessary for the conduct of a Partnership project (e.g. manpower, equipment and other direct costs such as materials and consumables) is eligible for cash rebate under the Scheme.  Some expenditure items (e.g. advertisement, entertainment and related expenses) are not eligible for cash rebate under the Scheme.

    

1. Similar to ITF collaborative projects, the cash rebate for Partnership projects is disbursed to a company in two phases (see paragraph 7 above).  The following flowchart illustrates the two phases of payment of cash rebate -

1. ITC reserves at all times the absolute right to require the applicant to submit additional documentary proof to substantiate its application. Applications without such proof will be rejected.

    

Disbursement of Cash Rebate

1. Upon approval of application, ITC will arrange to pay the cash rebate into the applicant’s company account as provided in the application form.  Applicants are required to notify ITC of any change in their company name, bank account or address immediately to facilitate communications and disbursement of cash rebate.  

    

2. ITC reserves at all times the absolute right to review all applications and adjust the cash rebate amount as necessary.  In the event that there is overpayment due to error in calculation or assessment, applicants are required to refund the amount overpaid within 30 days upon notification.

Notification of Results

1. Applications will be processed on a first-come-first-served basis.  ITC aims to complete the processing of an application for cash rebate within 30 working days from the date of the receipt of the duly completed application accompanied by all necessary documentation.  Applicants should ensure that applications are submitted with the correct payment instructions and the necessary supporting documents.  Failure to do so may cause delay in processing the applications, or even resulting in rejection of applications.  Applicants should contact the R&D Cash Rebate Scheme section of ITC if they do not hear or receive anything one month after submitting applications.

    

2. ITC will acknowledge receipt of pre-registration of Partnership projects within 5 working days, with a copy to the relevant research institution.

Amendment and Cancellation of Applications

1. If there is any change to the information contained in the application after its submission, the applicant should inform ITC in writing promptly and provide the supporting documents as appropriate.  Applicants are reminded that any amendments shall form an integral part of their applications.  Likewise, an applicant shall submit a written request to cancel its application.  

Handling of Information

1. Information provided by companies in their applications will be kept in confidence.  It may however be disclosed to the concerned research institution, other Government departments or third parties in Hong Kong, if such disclosure is necessary for the purposes of processing the application or required by law, or if explicit consent to such disclosure is given by the applicant/data subject.

Important Notes

1. It is the responsibility of the applicants to read carefully the Application Guide of the Scheme and complete the application forms fully and truthfully with all supporting documents as required by ITC.  Inaccurate and incomplete information may affect the consideration and processing of the applications, and may result in deferral or rejection.  Moreover, any misrepresentation or omission of information may lead to rejection of applications and/or full recovery of cash rebate already awarded, and possible court proceedings. Applicants are reminded that it is an offence to obtain property/pecuniary advantage by deception. Any person who does so commits an offence and is liable to legal proceedings.

Enquiries

1. Details of the designated local research institutions and their contact information are as follows -

1. Enquiries on the Cash Rebate Scheme can be directed to -

    

   R&D Cash Rebate Scheme Section
   Innovation and Technology Commission
   21/F, West Wing, Central Government Offices,
   2 Tim Mei Avenue, Tamar, Hong Kong
   Tel no.: (852) 3655 5718
   Fax no.: (852) 2957 8726
   E-mail: crs-enquiry@itc.gov.hk
   Web page: http://crs.itc.gov.hk
   
   Opening hours:  Mondays to Fridays: 0845 to 1230 hours and 1330 to 1800 hours.

Frequently Asked Questions (FAQs)