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Tax Thursday: Tax benefit documents on small business and R&D expense officially issued
Background
To continue implementing tax reduction policies to release the negative impact due to COVID-19, PRC tax bureau has officially issued corresponding documentation related to tax benefit on small business and R&D expense.
Details
PN [2021] No. 13 released on March 31 states that:
- for the part of the annual taxable income less than RMB 1 million of small and micro businesses enterprises, the part shall be reduced to 12.5% and included into the taxable income amount, and the enterprise income tax shall be paid at the tax rate of 20%.
PN [2021] No. 12 released on April 2 states that:
- with respect to research and development (R&D) expenses actually incurred by an MANUFACTURE enterprise from its R&D activities, an extra 100% of the actual amount of expenses is deductible before tax , in addition to other actual deductions, since January 1, 2021, provided that the said expenses are not converted into the intangible asset and balanced into this enterprise’s current gains and losses; however, if the said expenses have been converted into the intangible asset, such expenses may be amortized at a rate of 200% of the intangible asset’s costs before tax since January 1, 2021.
- MANUFACTURE enterprises that could enjoy above R&D super deduction could adept the benefit since the 3rd CIT quarter filing. (In previous regulation, R&D super deduction could NOT be applied to quarter filing)
We believe that more and more tax benefit policy shall be released since 2021 to revive the economy after COVID-19.
Questions
If you have any questions, please contact [email protected]