In order to implement the Law of the People's Republic of China on Enterprise Income Tax (EIT) and related tax policies, further streamline the tax information, and reduce the burden of tax administration, the State Administration of Taxation (SAT) has issued the Announcement of the State Administration of Taxation on Matters Relating to Annual Tax Returns for Enterprise Income Tax (the Announcement). Announcement"). It is now explained as follows:
I. Background
Since 2022, the Ministry of Finance, in conjunction with the SAT and other relevant departments, has issued a number of preferential policies on enterprise income tax to support the development of small and micro-niche enterprises, to incentivize enterprises to increase investment in research and development, and to promote the development of innovation in enterprises. The main ones are as follows:
(I) Supporting the Development of Small and Micro-profit Enterprises
Issuing the Announcement of the Ministry of Finance and the State Administration of Taxation on the Further Implementation of Preferential Policies on the Income Tax of Small and Micro Enterprises
(No. 13 of 2022), which extends the criteria for the determination of small and micro-profit enterprises, as well as a further halving of the enterprise income tax on the portion of the annual taxable income from one to three million yuan.(2) Incentives for enterprises to increase investment in R&D
One is the issuance of the
Ministry of Finance, State Administration of Taxation, Ministry of Science and Technology on further increasing the proportion of pre-tax deduction for R&D expenses of science and technology-based small and medium-sized enterprises (SMEs)
(No. 16 of 2022), the actual R&D expenses incurred by SMEs in carrying out R&D activities, which do not result in the formation of intangible assets to be included in the current period's profit and loss, will be deducted in accordance with the provisions of the actual deduction. In addition, on the basis of actual deduction in accordance with the regulations, since January 1, 2022, the actual amount incurred in accordance with the 100% pre-tax deduction; the formation of intangible assets, since January 1, 2022, in accordance with the intangible assets cost of 200% amortization before tax. Secondly, the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology issuedAnnouncement of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Increasing Support for Pre-tax Deduction for Scientific and Technological Innovation
(No. 28 of 2022), whereby enterprises currently subject to the pre-tax deduction ratio of 75% of R&D expenses are to be increased to 100% from Oct. 1, 2022, to Dec. 31, 2022, for the pre-tax deduction ratio.(C) Promoting Equipment Renewal and Technological Upgrading for Micro, Small and Medium Enterprises and High-Tech Enterprises
One is the issuance of the "Announcement of the Ministry of Finance and the State Administration of Taxation on the Policies Concerning Pre-tax Deduction of Income Tax on Equipment and Apparatus for Micro, Small and Medium Enterprises
" (No. 12 of 2022), whereby newly purchased micro, small and medium enterprises (MSMEs) during the period from January 1, 2022 to December 31, 2022 equipment and apparatus with a unit value of 5 million yuan or more shall voluntarily choose to deduct a certain percentage of the unit value before enterprise income tax. Secondly, the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Increasing the Support for Pre-tax Deduction for Scientific and Technological Innovation (No. 28 of 2022) was issued, and the newly acquired equipment and apparatus of high-tech enterprises during the period of October 1, 2022 to December 31, 2022 are allowed to be deducted in full at one time in that year in the calculation of taxable income, and are allowed to be deducted by 100% addition before tax.(4) Supporting the Development of Basic Research in China
Issuing the Announcement of the Ministry of Finance and the State Administration of Taxation on Preferential Tax Policies for Enterprises Investing in Basic Research (No. 32 of 2022), the expenditures on basic research funded by enterprises to nonprofit scientific research institutes, schools of higher education, and governmental natural science foundations can be deducted before tax according to the actual amount incurred in calculating taxable income, and 100% additional deduction is allowed before tax. The actual amount incurred can be deducted before tax when calculating taxable income, and 100% can be deducted before tax. Non-profit scientific research institutes and schools of higher education shall be exempted from enterprise income tax on the income from basic research funds received from enterprises, individuals and other organizations.
(E) Supporting Guangzhou Nansha to Deepen Comprehensive Cooperation among Guangdong, Hong Kong and Macao
Issuing the Circular of the Ministry of Finance and the State Administration of Taxation on Preferential Policies on Enterprise Income Tax in Guangzhou Nansha (Cai Shui [2022] No. 40), the enterprise income tax for eligible enterprises located in Nansha's early start-up zone is reduced by 15 percent.
(F) Supporting the Pilot Real Estate Investment Trusts in the Infrastructure Sector
Issuing the Announcement of the Ministry of Finance and the State Administration of Taxation on the Pilot Taxation Policies for Real Estate Investment Trusts (REITs) in the Infrastructure Sector (No. 3 of 2022), distinguishing between the pre-institution stage and the establishment stage of infrastructure REITs, and clarifying the pilot enterprise income tax policy. (No. 12) and the Announcement of the Ministry of Finance and the State Administration of Taxation of the Ministry of Science and Technology on Increasing the Support for Pre-tax Deduction for Scientific and Technological Innovation (No. 28 of 2022), the following new item has been added: "One-time deduction for high-tech enterprises for the purchase of equipment and appliances with a unit price of less than RMB 5 million in the fourth quarter of 2022 (October-December)". "High-tech enterprises in the fourth quarter of 2022 (October - December) acquisition of unit price of more than 5 million yuan of equipment and appliances for one-time deduction" "small and medium-sized micro-enterprises acquisition of unit price of more than 5 million yuan of equipment and appliances" and other matters for small and medium-sized micro-enterprises, High-tech enterprises to fill in the equipment and apparatus deduction related preferential policies.
(2) Detailed Table of Tax Adjustment for Enterprise Reorganization and Deferred Tax Matters (A105100)
According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Pilot Taxation Policies for REITs in Infrastructure Sector (No. 3 of 2022), the following item is added to the Detailed Table of Tax Adjustment for Enterprise Reorganization and Deferred Tax Matters (A105100) (A105100), and adding the section of "Real Estate Investment Trusts in the Infrastructure Sector" to the Schedule of Adjustments to Corporate Restructuring and Deferred Tax Matters (A105100), for taxpayers to fill in the information related to the tax policy of the pilot REITs in the infrastructure sector. At the same time, the inter-sheet relationship between the "Detailed Table of Tax Adjustment for Enterprise Reorganization and Deferred Tax Matters" (A105100) and the "Detailed Table of Tax Adjustment Items" (A105000) of the parent form is adjusted.
(3) Detailed Table of Tax Exemptions, Reduced Income and Additional Deductions and Preferences (A107010)
Firstly, in accordance with the Announcement of the Ministry of Finance and the State Administration of Taxation on Preferential Tax Policies for Enterprises Investing in Basic Research (No. 32 of 2022), line 16.1 "Income derived from basic research funding is exempt from enterprise income tax" and line 30.1 "Income derived from basic research funding is exempt from enterprise income tax" are added. " and Line 30.1 "Additional Deduction for Expenditures of Enterprises Investing in Basic Research" for taxpayers to fill in the tax incentives for enterprises investing in basic research.
The second is that according to the Announcement of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Increasing the Support for Pre-tax Deduction for Scientific and Technological Innovation (No. 28 of 2022), the "additive deduction ratio of ____%" in line 28 will be adjusted to "additive deduction ratio and the method of calculating it: ____ ", and accordingly add the code table of the deduction ratio and calculation method for creative design activities for taxpayers to choose to fill in the applicable deduction ratio and calculation method in accordance with the relevant policies; add line 28.1 "Deduction for the fourth quarter" and line 28.2 "Deduction for the first three quarters"; and add line 28.1 "Deduction for the first three quarters" and line 28.2 "Deduction for the first three quarters". Add line 28.1 "Deduction for expenses related to the fourth quarter" and line 28.2 "Deduction for expenses related to the first three quarters" for taxpayers to fill in the amount of deduction for expenses related to creative design activities in the fourth quarter of 2022 and the first three quarters of 2022.
Thirdly, according to the Announcement of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Increasing the Support for Pre-tax Deductions for Scientific and Technological Innovation (No. 28 of 2022), line 30.2, "Additional Deductions for Equipment and Apparatus of High-tech Enterprises" is added for the high-tech enterprises to fill in the amount of additional deduction for newly purchased equipment and apparatus for the fourth quarter of 2022 (October-December). For high-tech enterprises to fill in the fourth quarter (October-December) of 2022, the amount of deduction for newly purchased equipment and appliances.
(4) Detailed Table of Preferential Deductions for R&D Expenses (A107012)
According to the Announcement of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Increasing the Efforts of Supporting Pre-tax Deductions for Scientific and Technological Innovations (No. 28 of 2022), line 50, "Deduction Addition Proportion," is adjusted to read as follows "Deduction Ratio and Calculation Methods", and accordingly add the code table of R&D expenses deduction ratio and calculation methods for taxpayers to choose to fill in the applicable deduction ratio and calculation methods in accordance with the relevant policies; add the following lines: "Total amount of R&D expenses allowed to be deducted this year ", line L1.1 "Amount of R&D expenses allowed to be deducted in the fourth quarter", and line L1.2 "Amount of R&D expenses allowed to be deducted in the first three quarters" for taxpayers to fill in the amount of R&D expenses in the fourth quarter and the first three quarters of 2022. Amount of R&D expenses for the first three quarters.
(E) Schedule of Income Tax Preferences (A107040)
According to the Circular of the Ministry of Finance and the State Administration of Taxation on the Preferential Policies on Enterprise Income Tax for Hengqin Guangdong-Macao Deep Cooperation Zone (Cai Shui [2022] No. 19), the Circular of the Ministry of Finance and the State Administration of Taxation on the Preferential Policies on Enterprise Income Tax for Guangzhou Nansha Enterprises (Cai Shui [2022] No. 40), etc., add a detail under line 24, "Amount of R&D expenses allowed to be deducted in the first three quarters". Detailed rows are added under line 24 to further subdivide the regional preferential policies for taxpayers to fill in the relevant preferential policies of Hengqin Guangdong-Macao Deep Cooperation Zone, Pingtan Comprehensive Experimental Zone, Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone and Nansha Advance Start-up Zone respectively.
Third, the enterprise policy relocation matters attached to the information processing
In order to streamline the tax information, reduce the burden of enterprise tax, the occurrence of policy relocation matters of the enterprise in the year of the completion of the relocation, to the competent tax authorities to submit the annual tax return of the enterprise income tax, will no longer fill out and submit the "policy relocation of the enterprise clearing profit and loss statement".
Fourth, the implementation time
The Announcement is applicable to the annual enterprise income tax remittance in 2022 and the following years. If new policies are introduced in the future, the annual EIT return will be filed in accordance with the relevant provisions of the new policies. Where the rules relating to the enterprise income tax returns of previous years are inconsistent with this Announcement, no retroactive adjustment will be made. If the taxpayer adjusts the tax-related matters in the previous years, the taxpayer will adjust according to the relevant rules of the corresponding year's enterprise income tax return.