Taxation Of Artificial Intelligence Solutions – A Chinese Approach
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Technology Taxation, Automation Tax, China Taxation , Artificial Intelligence, Robot TaxAbstract
The rapid growth of artificial intelligence (AI) is prompting governments to address its economic, social, and ethical impacts through regulatory and tax policies. In China, AI is central to its innovation strategy, with tax incentives like reduced corporate income tax rates for high-tech enterprises, R&D expense deductions, and VAT exemptions on AI-related software services. Regional hubs such as Shenzhen and Hangzhou further support AI growth through subsidies and tax holidays. However, AI companies face challenges like complex tax codes, compliance costs, and classification ambiguities. Globally, AI taxation debates explore solutions like "robot taxes," automation levies, and adapting corporate tax structures to address revenue losses from reduced human employment while ensuring equitable contributions. Alternatives include taxing businesses for workforce reductions or providing credits for prioritizing human hiring. Effective AI taxation policies must balance innovation, social equity, and economic sustainability by ensuring neutrality, simplicity, and adaptability to future shifts. This paper examines China’s AI tax framework within this global context.
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