Recently, the Ministry of Finance and the State Administration of Taxation issued the Announcement on Further Improving the Policy of Pre-tax Deduction of R&D Expenses (Announcement No.13 of the Ministry of Finance and the State Administration of Taxation, 2021) to further encourage enterprises to increase R&D investment and support scientific and technological innovation.

1. The preferential content

The actual R&D expenses incurred by manufacturing enterprises in carrying out R&D activities; No intangible assets have been formed; If intangible assets are not formed and included in the profits and losses of the current period, on the basis of deduction according to regulations, from January 1, 2021, 100% of the actual amount will be deducted before tax; Forming intangible assets; If intangible assets are formed, they shall be amortized before tax according to 200% of the cost of intangible assets from January 1, 2021.

2. Enjoyment subject

Taking manufacturing business as its main business; The proportion of main business income to total income in the year of preferential treatment reached more than 50%; Hint: The scope of manufacturing industry is determined according to the National Economic Industry Classification (GB/T4574-2017). If the relevant state departments update the National Economic Industry Classification, its provisions shall prevail. The total income shall be implemented in accordance with Article 6 of the Enterprise Income Tax Law.

3. Enjoyment mode

When an enterprise prepays and declares the enterprise income tax in the third quarter (quarterly prepayment) or September (monthly prepayment) of the current year, it can choose to enjoy the preferential policy of adding and deducting R&D expenses in the first half of the current year. Take the following handling methods: self-determination, declaration and enjoyment, and keep relevant information for future reference. Eligible enterprises: calculate the deduction amount by themselves; Fill in the Monthly (Quarterly) Prepayment Tax Return of Enterprise Income Tax of the People's Republic of China (Class A) to enjoy tax benefits; Fill in the Schedule of R&D Expenses Added and Deducted Preferential Treatment (A107012) according to the R&D expenses enjoying additional and deducted preferential treatment (first half of the year). The Schedule of R&D Expenses Plus Deduction Preferential Treatment (A107012) shall be kept for future reference together with other information stipulated by relevant policies. Prompt: If an enterprise does not choose to enjoy the preferential policy of adding and deducting R&D expenses when handling the prepayment declaration in the third quarter or September, it can enjoy it uniformly when handling the final settlement and payment in the following year.

4. Execution time

Implemented as of January 1, 2021; Other policy standards and management requirements for enterprises to enjoy the policy of adding and deducting R&D expenses, It 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 Policy of Pre-tax Deduction of Research and Development Expenses (Cai Shui [2015] No.119) and the Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Relevant Policy Issues Concerning Pre-tax Deduction of Overseas Research and Development Expenses Entrusted by Enterprises (Cai Shui [2018] No.64).