毕马威：2021年5月中国税务警报（英文版）（2页）.pdf

1、1 1ChinaTax AlertIssue 7, May 202175% R&D super deduction extended, raised to 100% for manufacturersSummary:The 2021 government work report announced an extension of the existing 75% research and development (R&D) expense super deduction rules these had been due to expire by December 31, 2020. A fur

2、ther enhanced R&D super deduction will now be granted to manufacturing enterprises, i.e., the deduction rate for such enterprises will be raised to 100%. This will bring more significant tax-saving for enterprises. BackgroundOn March 5th, Premier Li Keqiang delivered the government work report at th

3、e Fourth Session of Chinas 13thNational Peoples Congress, with new goals on innovation-driven development during the 14thFive-Year Plan period (i.e., 2021 to 2025). Among the specific measures are continuance of the existing 75% R&D expense super deduction rules and an enhanced 100% super deduction

4、for manufacturing enterprises. This encourages enterprises to increase their R&D outlays. In the subsequent circulars released by Chinas Ministry of Finance (MOF), State Taxation Administration (STA), a three year extension was provided for the 75% R&D expense super deduction rules, i.e., the rules

5、have been extended to December 31, 2023. The MOF and STA also set out the implementation rules on the enhanced 100% super deduction rule for the manufacturing industry. China initially rolled out its R&D expense super deduction corporate income tax (CIT) policy in 1996, and it was originally solely

6、applicable to state-owned and collectively-owned industrial enterprises. The policy has since been extended to cover most of industries, and the bonus deduction rate raised to 75% (i.e. RMB1.75 deductible for every RMB1 of expenditure incurred) from the original 50%. Tax savings were RMB88 billion i