Industry News | Ministry of Finance, State Administration of Taxation Ministry of Science and Technology: Increase support for pre-tax deductions for scientific and technological innovation

Ministry of Finance, State Administration of Taxation, Ministry of Science and Technology

Announcement on increasing the pre-tax deduction for supporting scientific and technological innovation

Ministry of Finance, State Administration of Taxation Ministry of Science and Technology Announcement No. 28 of 2022

In order to support the innovation and development of high-tech enterprises and promote the renewal of enterprise equipment and technological upgrading, the relevant pre-tax deduction policy for enterprise income tax is hereby announced as follows:

1. The equipment and appliances newly purchased by high-tech enterprises between October 1, 2022 and December 31, 2022 are allowed to be deducted in full amount in one lump sum in the current year when calculating taxable income, and 100% additional deduction is allowed before tax. This policy is applicable to all enterprises with high-tech enterprise qualification in the fourth quarter of 2022. Where an enterprise chooses to apply the policy to insufficient deductions in the current year, it may carry forward it to the following year and implement it in accordance with the current relevant provisions. The above-mentioned equipment and appliances refer to fixed assets other than houses and buildings; The conditions and management measures for the so-called high-tech enterprises are implemented in accordance with the Notice of the Ministry of Science and Technology, the Ministry of Finance and the State Administration of Taxation on the Revision <高新技术企业认定管理办法>and Issuance of the Notice (Guoke Fahuo [2016] No. 32). The tax collection and management matters of enterprises enjoying this policy shall be implemented in accordance with the current collection and management regulations.

2. For enterprises with 75% of the pre-tax deduction ratio of R&D expenses currently applied, the pre-tax additional deduction ratio will be increased to 100% between October 1, 2022 and December 31, 2022. When an enterprise enjoys the preferential deduction of R&D expenses in the calculation of the settlement and payment of enterprise income tax in 2022, the R&D expenses in the fourth quarter can be calculated by the actual number of occurrences of the enterprise itself, or according to the actual R&D expenses incurred throughout the year multiplied by the number of operating months after October 1, 2022 to the actual number of operating months in 2022. The relevant policy caliber and management of the pre-tax deduction policy for enterprises to enjoy R&D expenses shall be implemented in accordance with the relevant provisions of the Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Improving the Pre-tax Additional Deduction Policy for Research and Development Expenses (Cai Shui [2015] No. 119), the Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Policy Issues Related to the Pre-tax Deduction of Overseas Research and Development Expenses Entrusted by Enterprises (Cai Shui [2018] No. 64) and other documents.

This is hereby announced.

Ministry of Finance, State Administration of Taxation, Ministry of Science and Technology

September 22, 2022