A recent meeting of the Political Bureau of the CPC Central Committee said that China will continue to implement a proactive fiscal policy, continue and implement tax and fee reduction policies, and vigorously support scientific and technological innovation, the development of the real economy and the development of micro, small and medium-sized enterprises. Here's the latest tax policy;

1. Promote R&D investment

The policy of raising the proportion of additional pre-tax deductions for R & D expenses of qualified enterprises in the industries from 75% to 100% will be implemented as institutional arrangements. At the same time, enterprises are allowed to enjoy the additional deduction policy of R & D expenses in advance, and increase the declaration period of pre-payment in July of the current year as the policy time point.

2. Support R&D equipment upgrade

The one-time pre-tax deduction for equipment and appliances of no more than 5 million yuan, as well as the full VAT refund for equipment purchased by domestic research and development institutions and foreign research and development centers, will be extended until the end of 2027.

3. VAT further deduction for advanced manufacturing enterprises

China gives special preferential deduction policies to advanced manufacturing enterprises, A further deduction of 5% on the basis of the existing VAT deduction, Continue to expand the amount of VAT credit. 

Advanced Manufacturing Enterprises refer to general taxpayers of manufacturing in high-tech enterprises, and high-tech enterprises refer to high-tech enterprises identified in accordance with the Notice of the Ministry of Science and Technology, the Ministry of Finance and the State Administration of Taxation on Revising and Issuing the Administrative Measures for the Identification of High-tech Enterprises (Guoke Fa Huo [2016] No. 32). 

The specific list of advanced manufacturing enterprises shall be determined by the industrial and information technology departments of each province, autonomous region, municipality directly under the Central Government and municipality separately listed in the plan, together with the science and technology, finance and taxation departments at the same level.

The above policies are equivalent to tax reduction and exemption for enterprises, which can reduce the burden of manufacturing enterprises. Only when enterprises meet the corresponding standards and requirements can they enjoy the corresponding tax incentives, which will promote the overall technological progress of the manufacturing industry and improve the competitiveness of the industry.

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