According to the Circular on Improving the Policy of Pre-tax Deduction of Research and Development Expenses (Cai Shui [2015] No. 119), the scope of additional deduction of R&D expenses for enterprise income tax is as follows:
1. Personnel labor expenses.
Wages and salaries, basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, industrial injury insurance premiums, maternity insurance premiums and housing provident fund of personnel directly engaged in R&D activities, as well as labor costs of external R&D personnel.
2. Direct input costs.
(1) The cost of materials, fuel and power directly consumed by R&D activities.
(2) for intermediate tests and product trial production of molds, process equipment development and manufacturing costs, does not constitute a fixed asset samples, prototypes and general test means acquisition costs, test products inspection costs.
(3) Costs of operation and maintenance, adjustment, inspection and repair of instruments and equipment used for research and development activities, as well as leasing fees for instruments and equipment used for research and development activities leased through operating leases.
3. Depreciation expenses.
Depreciation expense of instruments and equipment used for R&D activities.
4. Amortization of intangible assets.
Amortization expense of software, patents, and non-patented technologies (including licenses, proprietary technologies, designs and calculation methods, etc.) used for R&D activities.
5. Fees for the design of new products, the development of new process protocols, clinical trials for the development of new drugs, and field trials for exploration and development technologies.
6. Other related expenses.
Other costs directly related to R & D activities, such as technical library fees, data translation fees, expert consulting fees, high-tech R & D insurance premiums, R & D results of the search, analysis, evaluation, argumentation, identification, assessment, evaluation, acceptance costs, intellectual property rights, application fees, registration fees, agency fees, travel expenses, conference fees. The total amount of such expenses shall not exceed 10% of the total amount of deductible R&D expenses.
Expanded information:
The second article of Caixin [2007] No. 194 stipulates that the enterprise shall Define the scope and standard of expenditure on research and development costs, strict approval procedures, and in accordance with the research and development projects or undertake research and development tasks of the unit, set up a ledger to collect and account for research and development costs.
Enterprises obtain intellectual property rights in accordance with the law, intellectual property rights maintenance fees, litigation fees, agency fees, "counterfeiting" and other related costs incurred at home and abroad, from the management costs are charged according to the facts and should not be included in the R & D costs. Enterprise R & D organizations incurred various expenditures into the management of R & D costs, but at the same time bear the task of production, to be reasonably divided between R & D and production costs.
The fourth article of the fiscal enterprise [2007] No. 194 stipulates that enterprises can establish R & D reserve system, according to the R & D program and funding needs, in advance of the arrangement of funds to ensure that the need for R & D funding, R & D costs are included in the actual amount of costs (expenses).
Article 5 of Cai Qi [2007] No. 194 stipulates that enterprises shall disclose financial information related to R&D expenses in their annual financial accounting reports, including the scale of R&D expenses and its proportion of sales revenue, and the centralized collection and payment of R&D expenses. Accounting firms should pay attention to the use and management of R&D expenses when auditing the annual accounting statements of enterprises.
Baidu Encyclopedia - Notice on Improving the Policy of Pre-tax Deduction of Research and Development Expenses