R&D tax breaks ease corporate burdens

November 17, 2015 | BY

Katherine Jo &clp articles

New rules expand tax super-deductions to all R&D-related expenses including outsourcing fees and simplify guidelines with a negative list. Companies no longer need approval and can expect fewer negotiations with authorities

China has issued new rules that simplify R&D accounting for companies and substantially increase the scope of deductible expenses, in an effort to encourage more research and innovation in the country.

These were part of the Circular on Improving the Policy of Pre-tax Super-deduction of Research and Development Expenses (Circular), jointly issued by the Ministry of Finance, State Administration of Taxation and Ministry of Science and Technology on November 2 2015.

“The new scheme eases the compliance burden, as R&D companies no longer need to apply for preferential tax treatment,” said Lawrence Hu of MWE China Law Offices.

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