implementation time: this notice will be implemented as of 1 October 2116.

Notice of the Ministry of Finance, State Taxation Administration of The People's Republic of China and the Ministry of Science and Technology on Perfecting the Pre-tax Plus Deduction Policy for Research and Development Expenses

Caishui [2115] No.119

Finance Departments (bureaus), State Taxation Bureaus, Local Taxation Bureaus, Science and Technology Departments (bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government, and cities with separate plans, Finance Bureaus and Science and Technology Bureaus of Xinjiang Production and Construction Corps:

According to ". In order to further implement the spirit of "Several Opinions of the Central Committee of the State Council on Deepening the Reform of System and Mechanism and Accelerating the Implementation of Innovation-Driven Development Strategy", better encourage enterprises to carry out R&D activities (hereinafter referred to as R&D activities) and standardize the implementation of preferential policies for the addition and deduction of R&D expenses (hereinafter referred to as R&D expenses), the relevant issues concerning the pre-tax addition and deduction of R&D expenses of enterprises are hereby notified as follows: < P > 1. The scope of R&D activities and R&D expenses collection.

the r&d activities mentioned in this notice refer to the systematic activities with clear objectives that enterprises continue to carry out in order to acquire new scientific and technological knowledge, creatively apply new scientific and technological knowledge, or substantially improve technologies, products (services) and processes.

(1) Deducted R&D expenses are allowed to be added.

if the actual R&D expenses incurred by an enterprise in R&D activities are not included in the profits and losses of the current period, they will be deducted from the taxable income of this year according to 51% of the actual amount incurred in this year on the basis of actual deduction according to regulations; Where intangible assets are formed, they shall be amortized before tax according to 1.51% of the cost of intangible assets. The specific scope of R&D expenses includes:

1. Personnel labor expenses.

wages and salaries of personnel directly engaged in R&D activities, basic endowment insurance, basic medical insurance, unemployment insurance, work injury insurance, maternity insurance and housing accumulation fund, as well as labor costs of external R&D personnel.

2. Direct input cost.

(1) expenses of materials, fuel and power directly consumed by R&D activities.

(2) Development and manufacturing expenses of molds, process equipment used for intermediate test and trial production of products do not constitute the purchase expenses of samples, prototypes and general test means of fixed assets, and the inspection expenses of trial production products.

(3) expenses for operation, maintenance, adjustment, inspection and repair of instruments and equipment used for R&D activities, and rental expenses for instruments and equipment used for R&D activities rented through operating lease.

3. Depreciation expense.

depreciation expense of instruments and equipment used in R&D activities.

4. Amortization of intangible assets.

amortization expenses of software, patents and non-patented technologies (including licenses, know-how, design and calculation methods, etc.) used in R&D activities.

5. new product design fee, new process specification formulation fee, clinical trial fee for new drug development, and field trial fee for exploration and development technology.

6. Other related expenses.

other expenses directly related to R&D activities, such as technical books and materials, materials translation fees, expert consultation fees, high-tech R&D insurance fees, search, analysis, appraisal, appraisal, evaluation and acceptance fees of R&D results, application fees, registration fees, agency fees, travel expenses, conference fees, etc. The total amount of this expense shall not exceed 11% of the total amount of R&D expenses that can be added and deducted.

7. Other expenses stipulated by the Ministry of Finance and State Taxation Administration of The People's Republic of China.

(2) The pre-tax deduction policy is not applicable to the following activities.

1. Regular upgrading of enterprise products (services).

2. the direct application of a scientific research achievement, such as the direct adoption of open new technologies, materials, devices, products, services or knowledge.

3. Technical support activities provided by enterprises to customers after commercialization.

4. Repeated or simple changes to existing products, services, technologies, materials or technological processes.

5. Market research, efficiency survey or management research.

6. As an industrial (service) process link or routine quality control, test analysis and maintenance.

7. Research in social science, art or humanities.

II. Handling of Special Matters

1. The expenses incurred by the enterprise in entrusting external institutions or individuals to carry out R&D activities shall be included in the R&D expenses of the entrusting party according to 81% of the actual amount of the expenses, and the additional deduction shall be calculated, and the entrusted party shall not make any additional deduction. The actual amount of commissioned external research and development expenses shall be determined according to the principle of independent transaction.

if there is a relationship between the entrusting party and the entrusted party, the entrusted party shall provide the entrusting party with the detailed information on the expenses of the R&D project.

the expenses incurred by enterprises in entrusting overseas institutions or individuals to carry out R&D activities shall not be deducted.

2. For the projects jointly developed by the enterprise * * *, the partners shall separately calculate and deduct their own actual R&D expenses.

3. according to the actual situation of production, operation and scientific and technological development, the enterprise group can reasonably determine the allocation method of R&D expenses for projects with high technical requirements and large investment that need centralized R&D, and the actual R&D expenses can be calculated and deducted by the relevant member enterprises according to the principle of consistency of rights and obligations and matching of expenses and income sharing.

4. related expenses incurred by enterprises in creative design activities to obtain innovative, creative and breakthrough products can be deducted before tax according to the provisions of this notice.

Creative design activities refer to the development of multimedia software, animation game software, digital animation and game design and production; Building engineering design (the evaluation standard of green building is Samsung) and special design of landscape engineering; Industrial design, multimedia design, animation and derivative product design, model design, etc.

III. Accounting and Management

1. Enterprises should account for R&D expenditures in accordance with the requirements of the national financial accounting system; At the same time, auxiliary accounts are set up for R&D expenses that can be deducted according to R&D projects, and the actual amount of R&D expenses that can be deducted in the current year can be accurately collected and accounted. If an enterprise conducts multiple R&D activities in a tax year, it shall separately collect the R&D expenses that can be deducted according to different R&D projects.

2. Enterprises should separately account for R&D expenses and production and operation expenses, and accurately and reasonably collect all expenses. If the division is unclear, additional deduction is not allowed.

IV. Industries to which the pre-tax deduction policy is not applicable

1. Tobacco manufacturing.

2. Accommodation and catering industry.

3. Wholesale and retail.

4. Real estate.

5. Leasing and business services.

6. Entertainment industry.

7. Other industries specified by the Ministry of Finance and State Taxation Administration of The People's Republic of China.

the above industries are subject to the national economic industry classification and code (gb/4754 -2111), and will be updated accordingly.

V. Management matters and requirements for collection and management

1. This circular is applicable to resident enterprises with sound accounting, audit collection and accurate collection of R&D expenses.

2. If the actual amount of R&D expenses of an enterprise is not accurately collected and the total amount of foreign exchange is not accurately calculated, the tax authorities have the right to make reasonable adjustments to the pre-tax deduction or additional deduction.

3. If the tax authorities have any objection to the R&D projects that enterprises enjoy the preferential treatment of adding and deducting, they may refer them to the administrative department of science and technology at or above the prefecture level to issue appraisal opinions, and the scientific and technological department shall reply to the opinions in time. Enterprises undertaking scientific research projects at or above the provincial or ministerial level, as well as cross-year R&D projects that have been identified in previous years, do not need to be identified.

4. if an enterprise meets the conditions of R&D expenses plus deduction specified in this notice and fails to enjoy the tax preferential treatment in time after October 1, 2116, it can enjoy the tax preferential treatment retroactively and perform the filing procedures, with a retrospective period of up to 3 years.

5. The tax authorities should strengthen the follow-up management of preferential policies for R&D expenses plus deduction, and conduct regular inspections, with the annual inspection coverage not less than 21%.

VI. Execution time

This notice shall be implemented as of 1 October 2116. The Notice of State Taxation Administration of The People's Republic of China on Printing and Distributing the Administrative Measures for Pre-tax Deduction of Research and Development Expenses of Enterprises (for Trial Implementation) (Guo Shui Fa [2118] No.116) and the Notice of the Ministry of Finance State Taxation Administration of The People's Republic of China on Relevant Policy Issues Concerning Pre-tax Deduction of Research and Development Expenses (Cai Shui [2113] No.71) shall be abolished at the same time.