China grants up to 200% tax deduction on intangible assets acquired through R&D. Means your spending on AI training fees becomes a tax return amount or like appears as a magical donation deductible on the books. I don't know if DeepSeek is benefiting from exactly such a system, but that's generally how aggressively China seeks its advantages in high tech R&D.
Nobody else is or has been that aggressive. France on a Monday morning would be like $10b for Mistral in 3 years, and that'll be it. China is like $10b every year for 5 top companies for 5 years. Not necessarily to say such an all-in-doubling-down-always moves would be necessary or correct, but there is that kind of substantial funding disparity between China and the rest of the world.
> China grants up to 200% tax deduction on intangible assets acquired through R&D. Means your spending on AI training fees becomes a tax return amount or like appears as a magical donation deductible on the books.
This is misleading. Deduction reduces taxable income and does not provide tax return. E.g. if your taxable income is $1000 and you spent $100 on R&D and qualify for those 200%, $800 will be taxed.
Thanks for adding that, still very interesting idea. Perhaps this >100% tax deduction could eventually be applied to human labor to help incentivize employment and subsidize it with automation profits.
Although you can often take losses from a previous year to offset current income. So if you do a huge amount of capital investment you can offset against profits for years.
> Although you can often take losses from a previous year to offset current income
This is true, usually for 5 years.
> So if you do a huge amount of capital investment you can offset against profits for years.
Articles 11, 12, 18, and 28 [0] say that capital investment can reduce tax based on the depreciation or amortization cost, not by carrying forward the investment as a loss.
Nothing in the Chinese tax law says that DeepSeek can receive tax returns or free handouts from the government because they do R&D.
Does DeepSeek not maintain an international financial structure to keep international profits offshore until it is convenient for them to be taxed? I can't think of a billion dollar corp that doesn't, but then Jack Ma went to a gulag for a year.
I'm not the DeepSeek Intl CFO. And DeepSeek doesn't do R&D outside of China. Platform.deepseek.com manages multiple payment providers, including companies created to support options outside of alipay/unionpay.
The default one is the standard deepseek:
12F, Galaxy International Building
Gongshu Dist, Hangzhou 310003
Zhejiang, China
It's interesting how you assume a bad actor by default. Not really an 'innocent until proven guilty' mindset. And providing misinformation too.
> but then Jack Ma went to a gulag for a year.
He never went to a gulag, and there is no information whatsoever about the reason he was put under a 'house arrest'. If you are close to those circles maybe you want to share the details of your claims?
Nobody else is or has been that aggressive. France on a Monday morning would be like $10b for Mistral in 3 years, and that'll be it. China is like $10b every year for 5 top companies for 5 years. Not necessarily to say such an all-in-doubling-down-always moves would be necessary or correct, but there is that kind of substantial funding disparity between China and the rest of the world.