A basic provision
Article 30 of the Enterprise Income Tax Law stipulates that the following expenditures can be deducted when calculating taxable income: 1. research and development costs incurred in the development of new technologies, new products, new processes; 2. wages paid for the resettlement of disabled persons and other employment encouraged by the state. Wages paid. Article 95 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that the deduction of research and development costs referred to in Article 30(1) of the Enterprise Income Tax Law refers to the research and development costs incurred by the enterprise for the development of new technologies, new products, new technologies, and the formation of intangible assets included in the current period's profit and loss, in accordance with the provisions of the actual deduction based on the basis of the research and development costs in accordance with the 50% deduction; the formation of intangible assets, the formation of intangible assets, the formation of intangible assets, in accordance with the research and development costs in accordance with the 50% deduction. Intangible assets, in accordance with the cost of intangible assets amortized at 150%. Tips for enterprises to obtain innovative, creative, breakthrough products for creative design activities and related costs incurred, can be regarded as three new R & D costs for pre-tax deduction. Creative design activities refers to multimedia software, animation and game software development, digital animation, game design and production; housing construction engineering design (green building evaluation standards for three-star), landscape engineering special design; industrial design, multimedia design, animation and derivative product design, model design.2. Increase in the proportion of deduction
1. The Notice of the Ministry of Finance, the State Administration of Taxation, and the Ministry of Science and Technology on the Improvement of the Proportion of Pre-tax Deduction for Research and Development Expenses (Cai Shui [2018] No. 99) and the Announcement of the Ministry of Finance and the State Administration of Taxation on the Extension of the Period of Implementation of Partial Tax Preferential Policies (Announcement No. 6 of 2021) stipulate that The actual R&D expenses incurred by enterprises in carrying out R&D activities, which are not formed into intangible assets to be recognized as current profit and loss, shall be deducted before tax in accordance with 75% of the actual amount incurred during the period from January 1, 2018 to December 31, 2023 on top of the actual deduction in accordance with the regulations; and if the intangible assets are formed, they shall be amortized in accordance with 175% of the cost of the intangible assets during the abovementioned period before tax. 2. "Ministry of Finance General Administration of Taxation on further improving the policy of pre-tax deduction of research and development costs" (Announcement No. 13 of 2021) provides that manufacturing enterprises to carry out research and development activities in the actual incurred research and development costs, not formed intangible assets included in the current profit and loss, in accordance with the provisions of the actual deduction based on the provisions of the January 1, 2021 onwards, and then in accordance with the actual amount of 100% in the pre-tax deduction; in accordance with the actual amount of 100% in the pre-tax deduction; the formation of intangible assets, in accordance with the cost of intangible assets in the above period of 175% in pre-tax amortization. Deduction before tax; the formation of intangible assets, since January 1, 2021, in accordance with the cost of intangible assets 200% amortized before tax. 3. "Ministry of Finance, State Administration of Taxation, Ministry of Science and Technology on further increasing the proportion of pre-tax deduction of research and development costs of science and technology-based small and medium-sized enterprises" (Announcement No. 16 of 2022), the actual incurred research and development costs of science and technology-based small and medium-sized enterprises to carry out research and development activities, not forming intangible assets included in the current period's profit and loss, in accordance with the provisions of the basis of the actual deduction since January 1, 2022, and in accordance with the actual amount of 100% of the deductions in the pre-tax. The actual amount of 100% in the pre-tax deduction; the formation of intangible assets, since January 1, 2022, in accordance with the intangible asset cost of 200% in the pre-tax amortization. Tip 1 in addition to the negative list of industries listed outside the taxpayer, before December 31, 2023, can be in accordance with the provisions of the document Cai Shui [2018] No. 99, according to the proportion of 75% deduction of research and development costs. Tip 2 manufacturing taxpayers, can be in accordance with the provisions of Announcement No. 13 of 2021, in accordance with the proportion of 100% additional deduction of R & D expenses, and there is no deadline. The so-called manufacturing enterprises, refers to the manufacturing business as the main business, to enjoy the preferential year the main business income accounted for the proportion of total income of more than 50% of the enterprise. The scope of manufacturing industry is determined in accordance with the National Economic Industry Classification (GB/T 4574-2017). The total revenue is in accordance with the provisions of Article 6 of the Enterprise Income Tax Law. Tip 3 Science and technology-based small and medium-sized enterprises (SMEs), can add and deduct R&D expenses at a rate of 100% in accordance with the provisions of Announcement No. 16 of 2022, and there is no restriction on the industry and cut-off time. Science and technology-based small and medium-sized enterprises conditions and management methods in accordance with the "Ministry of Science and Technology Ministry of Finance State Administration of Taxation on the issuance of of the notice" (State Science and Technology Development Government [2017] No. 115). Tip 4 The purpose of the policy of adding deduction for R&D expenses is to encourage independent research and development, and the identification of high-tech enterprises is a very high threshold, can not be because the enterprise has not been identified as a high-tech enterprise, not to encourage its independent research and development, so, whether or not a high-tech enterprise, the enterprise qualifies for R & D expenses can be added to the deduction.Three, allow the deduction of research and development costs
(a) the scope of research and development costs
"Ministry of Finance, State Administration of Taxation, Ministry of Science and Technology on the improvement of pre-tax deduction of research and development costs of the notice" (Cai Shui [2015] No. 119), Article 1, paragraph (), provides that, in the case of a high-tech enterprise, the enterprise is not encouraged to develop its own research and development, so, regardless of whether it is a high-tech enterprise, the enterprise can meet the conditions for deduction. Article 1(1) of the Circular (Cai Shui [2015] No. 119) stipulates that the specific scope of research and development expenses includes: 1. personnel labor costs; 2. direct input costs; 3. depreciation expenses; 4. amortization of intangible assets; 5. design costs of new products, the development of new process protocols, the development of new drugs and clinical trials, and the field testing of exploration and development technologies; 6. other related expenses; 7. Other expenses stipulated by the Ministry of Finance and the State Administration of Taxation. The Announcement of the State Administration of Taxation on the Relevant Issues Regarding the Scope of the Collection of Pre-Tax Deductions for Research and Development Expenses (Announcement of the General Administration of Taxation No. 40 of 2017) provides a detailed specification of the specific content included in each of the above deductions for research and development expenses. 1. Personnel labor costs. This refers to the wages and salaries of personnel directly engaged in R&D activities, basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, industrial injury insurance premiums, maternity insurance premiums and housing fund, as well as the labor costs of external R&D personnel. (1) directly engaged in research and development activities, including researchers, technicians, support staff. Researchers are mainly engaged in research and development projects professionals; technicians are engineering, natural sciences and life sciences in one or more areas of technical knowledge and experience, under the guidance of the researchers to participate in research and development work; auxiliary personnel refers to the participation of research and development activities of the mechanic. External R&D personnel refers to researchers, technicians and auxiliary personnel who have signed labor employment agreements (contracts) with the enterprise or labor dispatch enterprises and are employed on a temporary basis. Acceptance of labor dispatch enterprises in accordance with the agreement (contract) agreed to pay to the labor dispatch enterprises, and the actual payment of wages and salaries by the labor dispatch enterprises to the external R & D staff costs, belonging to the external R & D staff labor costs. (2) Salaries and wages, including pre-tax deduction in accordance with the provisions of the research and development personnel can be deducted from the expenditure of equity incentives. (3) directly engaged in R & D activities, external R & D personnel engaged in non-R & D activities at the same time, the enterprise should make the necessary records of its personnel activities, and its actual costs incurred in accordance with the proportion of actual hours worked and other reasonable methods of R & D costs and production and operating costs between the allocation, not allocated shall not be added to the deduction. Tip 1 external R & D personnel (including the form of labor dispatch), whether it is in accordance with the agreement (contract) agreed to pay directly to the labor dispatch company's costs (labor fees), or directly to the individual employee's costs (wages and salaries, benefits), are included in the scope of the R & D expenses deducted. Tips 2 eligible for R & D staff equity incentive spending is deductible, but enjoy the deduction of equity incentive spending needs to comply with the conditions set out in the General Administration of Taxation Announcement No. 18 of 2012. 2. Direct input costs. R & D activities directly consumed materials, fuel and power costs; for intermediate testing and product trials of molds, process equipment development and manufacturing costs, does not constitute a fixed asset samples, prototypes and general test means of acquisition costs, test products, inspection costs; for R & D activities of the instrumentation, equipment, operation and maintenance, adjustments, inspections, repairs, and other costs, as well as through the operating lease leased in the form of rental for R & D activities of instruments, equipment rental fees. Instruments, equipment leasing fees. (1) leased under operating leases for R & D activities of instruments, equipment, and at the same time used for non-R & D activities, the enterprise should make the necessary records of the use of its instruments and equipment, and its actual incurred rental costs according to the actual hours of work accounted for by the proportion of the actual method of allocation of R & D costs and production and operating costs, not allocated shall not be added to the deduction. (2) enterprise R & D activities directly formed products or as part of the formation of the product sales, R & D costs in the corresponding material costs are not deductible. Product sales and corresponding material costs occur in different tax years and material costs have been included in the R & D costs, can be sold in the corresponding material costs incurred in the year directly offset the current year's R & D costs, less than the offset, carry over to the next year to continue to offset. Tips for R & D activities directly formed products or as part of the formation of products sold externally, R & D costs corresponding to the material costs shall not be deducted. However, the actual material costs and product sales are not in the same tax year, it is not necessary to retroactively reduce the R & D costs to the year the material costs actually incurred. 3. Depreciation expenses. For R & D activities of instruments, equipment depreciation. (1) for R & D activities of instruments, equipment, while used for non-R & D activities, enterprises should make the necessary records of the use of its equipment, and its actual depreciation costs incurred according to the proportion of the actual hours of work and other reasonable methods of R & D costs and production and operating costs between the allocation, not allocated shall not be deducted. (2) enterprises for R & D activities of instruments, equipment, in line with the provisions of the tax law and the choice of accelerated depreciation preferential policies, in the enjoyment of R & D expenses before tax deduction policy, the depreciation of pre-tax deductions on the calculation of deductions. Tips for enterprises for R & D activities of instruments, equipment, in line with the provisions of the tax law and the choice of accelerated depreciation preferential policies, you can enjoy the pre-tax deduction of R & D expenses. Accelerated depreciation expenses for the collection method for the pre-tax deduction of the depreciation part of the calculation (tax depreciation) plus deductions, neither accounting depreciation, nor in accordance with the principle of accounting, tax depreciation lesser of the amount to determine the amount of deduction. 4. Amortization of intangible assets. Refers to the software used for research and development activities, patents, non-patented technology (including licenses, know-how, design and calculation methods, etc.) amortization costs. (1) intangible assets for research and development activities, while used in non-research and development activities, enterprises should make the necessary records of the use of its intangible assets, and its actual amortization costs incurred in accordance with the proportion of actual hours worked and other reasonable methods in the research and development costs and production and operating costs between the allocation, not allocated shall not be added to the deduction. (2) intangible assets for R & D activities, in line with the provisions of the tax law and choose to shorten the amortization period, in the enjoyment of R & D expenses pre-tax deduction policy, the amortization of pre-tax deduction for the calculation of additional deductions. Tips intangible assets to shorten the amortization period of the amortization cost of the collection method, and accelerated depreciation of fixed assets to maintain consistency with the collection method, the amortization of pre-tax deduction on the calculation of deductions. 5. New product design costs, new process protocol development costs, clinical trials of new drug development costs, exploration and development of technology field test costs. Refers to enterprises in the design of new products, new process protocols, clinical trials for the development of new drugs, exploration and development of technology in the process of field trials and activities related to the various types of costs. 6. Other related costs. Refers to other costs directly related to R & D activities, such as technical library fees, data translation costs, expert consulting fees, high-tech R & D insurance premiums, R & D results of the search, analysis, evaluation, argumentation, appraisal, assessment, evaluation, acceptance costs, intellectual property rights, application fees, registration fees, agency fees, travel expenses, meeting expenses, employee benefits, supplemental pension premiums, supplementary medical insurance premiums. Other related expenses are subject to a limit on the amount of deduction, and the total amount of such expenses shall not exceed 10% of the total amount of deductible R&D expenses. It should be noted that, according to the "State Administration of Taxation on the further implementation of the R & D cost deduction policy notice" (General Administration of Announcement No. 28 of 2021), Article 3, since the beginning of the year 2021, enterprises in a tax year at the same time to carry out a number of R & D activities, from the original R & D projects in accordance with the original calculation of each of the other relevant costs, and the limit of the other related costs. The limit of "other related expenses" for each R&D project has been changed to a unified limit of "other related expenses" for all R&D projects. Enterprises in accordance with the following formula to calculate the "other related costs" limit, of which the costs incurred in the capitalization project in the formation of intangible assets in the year into the calculation: All R & D projects, other related costs limit = all R & D projects, such as labor and other five costs and the sum of personnel ÷ (1 - 10%) × 10% "Personnel and labor costs" refers to the above "personnel and labor costs," "direct input costs," "depreciation costs," "intangible costs," and "intangible costs. ""Amortization of intangible assets" and "new product design fees, new process protocol development fees, clinical trial fees for new drug development, and field trial fees for exploration and development technologies". The deduction rule for "other related expenses" is that when the actual number of "other related expenses" incurred is less than the limit, the pre-tax deduction will be calculated according to the actual number of expenses incurred; when the actual number of "other related expenses" incurred is greater than the limit, the pre-tax deduction will be calculated according to the actual number of expenses incurred. The actual number of "other related costs" is greater than the limit, according to the limit to calculate the amount of pre-tax deduction. Tips for R & D activities occurring in the enterprise expenditure, accounting for R & D expenditures and capitalized R & D expenditures are divided into two kinds of expenditures. The so-called "expense R & D expenditures", refers to R & D expenditures directly into the current profit and loss, in the year of occurrence of a one-time pre-tax deduction; and "capitalized R & D expenditures", refers to the relevant R & D expenditures are included in the cost of the intangible assets, to be developed successfully, from the intangible assets to reach The capitalized R&D expenditures are included in the cost of the intangible assets, which will be deducted by amortization across the years after the successful development of the intangible assets from the time they reach their intended use. If the enterprise R & D costs involved in both expensed and capitalized expenditures, in accordance with the following case of the steps of the formation of intangible assets in the capitalization of the "other related costs" to be adjusted for the stripping, and then can be deducted for the "other related expenses" Amortization. For example, a company has two R&D projects, A and B, in FY2022. Project A personnel labor and other five costs sum of 8 million yuan, "other related costs" for 1.2 million yuan, all expensed; project B personnel labor and other five costs sum of 10 million yuan, "other related costs" for 1.8 million yuan, all Capitalization, the project in 2022 to form an intangible asset. For the capitalization of this case in the "other related costs" can be in accordance with the following "four-step method" for stripping adjustments: The first step, according to the current year, all the cost of the project and the end of the year, the capitalization of the project is calculated uniformly all the projects of the year! "Other related costs" limit. Summarize the calculation of the two projects "other related costs" limit: (800 +1000) ÷ (1-10%) × 10% = 200 (million). The second step, according to the principle of the smaller, compare the "other related costs" limit with the actual number of the size, to determine the amount of "other related costs" can be deducted. A and B two projects can be deducted "other related costs" limit of 2 million yuan, the actual incurred "other related costs" of 3 million yuan (120 +180), should be deducted according to the limit of 2 million yuan. The third step, the amount of deductible "other related costs" divided by the actual incurred "other related costs" of all the projects, the proportion of deductible. Calculate the proportion of "other related expenses" that can be deducted for all projects: 200 ÷ 300 = 66.67%. The fourth step, multiply the deductible percentage by the actual "other related costs" incurred in each capitalization project, the capitalization of a single project can be deducted "other related costs", and the other deductible R & D costs of the project and amortized in subsequent years. Amortization in future years. Calculate the capitalized costs of project B can be deducted "other related costs": 180 × 66.67% = 1.2 (million yuan), the excess of 600,000 yuan (180-120) is not allowed to deduct. After the above four steps, calculated the capitalization of the B project to form intangible assets in the R & D costs can be deducted "other related costs", the B project can be deducted R & D costs totaling 1,000 +120 = 11.2 (million). Project A can be deducted for 800 + 120 × 66.67% of the cost of R & D expenses = 8.8 (million yuan), can be deducted in a one-time in the current period.(2) special matters
1. government grants obtained by the enterprise, the accounting treatment of R & D costs using a direct method of offsetting and tax treatment is not recognized as taxable income, should be calculated according to the balance of the offsetting deduction amount. 2. Enterprises to obtain the R & D process of the formation of scraps, defective products, intermediate trial products and other special income, in the calculation of the year of recognition of income deduction of R & D expenses, should be from the R & D expenses have been collected in the deduction of the special income, less than the deduction of R & D expenses deducted according to the zero calculation. 3. Enterprises to carry out R & D activities in the actual incurred R & D costs to form intangible assets, the capitalization of the point of time with the accounting treatment to maintain consistency. 4. R&D costs incurred in failed R&D activities can enjoy pre-tax deduction. 5. Enterprises in line with the provisions of the R & D costs plus deduction conditions in January 1, 2016 after the timely enjoyment of the tax incentives, you can retroactively enjoy and retain the information, the retroactive period of up to three years. Tip1 In 2017, the Ministry of Finance revised the "Accounting Standard for Business Enterprises No. 16 - Government Grants". Compared with the original standard, the revised standard adds the net method on top of the gross method, which allows government grants to be directly deducted as related costs. According to the provisions of the Enterprise Income Tax Law, government grants received by an enterprise should be recognized as income and included in gross income. In this way, if accounting for government grants to choose the net method, the tax will produce a difference. Enterprises in the tax government grants recognized as taxable income, while increasing R & D expenses, plus deductions should be deducted before tax R & D expenses as the basis. However, if the enterprise does not make corresponding adjustments, the pre-tax deduction of R&D expenses and accounting deduction amount is the same, the accounting should be offset by the balance of the calculation of the amount of deduction. For example, an enterprise (non-manufacturing and technology-based small and medium-sized enterprises) R & D expenditures of 2.4 million yuan in the current year, to obtain government grants of 600,000 yuan (according to the net method of accounting), accounting for R & D costs of 1.8 million yuan in the current year, without making the corresponding tax adjustments, the amount of pre-tax deduction for the 180 × 75% = 1.35 million yuan. Tip 2 according to the "Ministry of Finance, State Administration of Taxation on the implementation of enterprise income tax incentives on a number of issues of the notice" (Cai Shui [2009] No. 69) Article II provides that the Enterprise Income Tax Law and its implementing regulations in the provisions of the tax incentives, where the enterprise meets the prescribed conditions, can be enjoyed at the same time. Therefore, enterprises are eligible to enjoy the R & D costs plus deduction policy conditions, but also eligible to enjoy the conditions of other preferential policies, you can enjoy the relevant preferential policies at the same time.(three) three types of R & D costs of the scope of the similarities and differences
In practice, taxpayers are often accounting caliber, high-tech enterprise caliber of R & D costs and deductions for R & D costs of the caliber confusion. In fact, these three types of R & D costs collection caliber there is a certain difference, the main reasons for the formation of the difference are as follows: 1. Accounting caliber of R & D costs. Its main purpose is to accurately account for the expenditure of enterprise R & D activities, and enterprise R & D activities are based on their own production and operation of their own judgment, in addition to the activity should be R & D activities, there are no excessive restrictions. The policy is based on the "Ministry of Finance on the enterprise to strengthen the financial management of R & D costs of a number of opinions" (Cai Qi [2007] No. 194). 2. High-tech enterprises recognized the caliber of R & D expenses. Its main purpose is to determine the intensity of R & D investment, scientific and technological strength of the enterprise to meet the standards of high-tech enterprises, therefore, including R & D costs, including the identification of conditions have certain limitations. The policy is based on the "high-tech enterprises recognized management guidelines" (issued by the State Science and Technology Development Fire [2016] No. 195). 3. Plus deduction policy caliber of R & D expenses. Its main purpose is to refine which R & D costs can enjoy the benefits of additional deduction, to guide enterprises to increase R & D investment, mainly including R & D direct investment and higher relevance of the cost of other costs have a certain proportion of the limitations, so the policy caliber of the smallest.