Circular on Relevant Enterprise Income Tax Policies for the Deduction of Equipment and Instruments

(Issued by the Ministry of Finance and the State Administration of Taxation on May 7, 2018.)

Cai Shui [2018] No.54

Finance departments (bureaus), offices of the State Administration of Taxation and local taxation bureaus of the provinces, autonomous regions, municipalities directly under the central government and cities with independent development plans, and the Finance Bureau of the Xinjiang Production and Construction Corps:

With a view to inducing enterprises to increase their investments in equipment and instruments, we hereby notify you on relevant enterprise income tax policies as follows:

1 . Enterprises are permitted to count on one occasion equipment and instruments with a unit value not exceeding Rmb5 million newly purchased between January 1, 2018 and December 31, 2020 as part of their costs for the period in question and to deduct the same when calculating their taxable income, and are no longer required to calculate depreciation year by year. Where the unit value exceeds Rmb5 million, matters shall continue to be handled in accordance with relevant provisions such as the Implementing Regulations for the Enterprise Income Tax Law, the Ministry of Finance and State Administration of Taxation, Circular on Improving the Enterprise Income Tax Policy of Accelerated Depreciation of Fixed Assets (Cai Shui [2014] No.75), and the Ministry of Finance and State Administration of Taxation, Circular on Further Improving the Enterprise Income Tax Policy of Accelerated Depreciation of Fixed Assets (Cai Shui [2015] No.106).

2 . For the purposes of this Circular, the term “equipment and instruments” means fixed assets other than premises and buildings.