Announcement on Further Improving the Policy of Pre-tax Super Deduction for R&D Expenses

关于进一步完善研发费用税前加计扣除政策的公告 (中文)

MOF/STA Announcement [2023] No.7 — Jointly issued by the Ministry of Finance and the State Taxation Administration on March 26, 2023. Effective from January 1, 2023.

Sources:

• Chinese text: 税屋 (Shui5)

All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.

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In order to further encourage enterprises to increase R&D investment and better support scientific and technological innovation, the following announcement is hereby made on issues concerning the policy of pre-tax super deduction for R&D expenses:

Point 1 — 100% Super Deduction / 200% Amortization

Where R&D expenses actually incurred by an enterprise in the course of R&D activities have not formed intangible assets and are included in the current period's profit or loss, in addition to deducting the actual amount as prescribed, from January 1, 2023, an additional 100% of the actual amount incurred shall be deducted before tax.

Where R&D expenses have formed intangible assets, from January 1, 2023, such assets shall be amortized before tax at 200% of the cost of the intangible asset.

Point 2 — Other Policy Requirements Unchanged

Other policy requirements and administrative rules for enterprises enjoying the R&D expense super deduction policy shall be implemented in accordance with the relevant provisions of Caishui 2015 No.119 (Circular on Improving the Policy of Pre-tax Super Deduction for R&D Expenses), Caishui 2018 No.64 (Notice on Issues Concerning Pre-tax Super Deduction for R&D Expenses Entrusted to Overseas Entities), and other applicable documents.

Point 3 — Effective Date and Repealed Provisions

This Announcement shall take effect from January 1, 2023. The following are simultaneously repealed:

1. Announcement on Further Improving the Policy of Pre-tax Super Deduction for R&D Expenses (MOF/STA Announcement [2021] No.13);
2. Announcement on Further Increasing the Pre-tax Super Deduction Ratio for R&D Expenses of Technology-based SMEs (MOF/STA/MOST Announcement [2022] No.16);
3. Announcement on Strengthening Pre-tax Deduction Support for Scientific and Technological Innovation (MOF/STA/MOST Announcement [2022] No.28).

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Ministry of Finance / State Taxation Administration

March 26, 2023