On corporate tax issues, the state has always provided preferential policy support. Recently, the government has introduced a new tax policy. On March 24, the State Council executive meeting made it clear that the research and development expenses of manufacturing enterprises will be The super deduction ratio has been increased from 75 to 100, and the accounting method for super deduction settlement of R&D expenses has been reformed to encourage enterprise innovation and promote industrial upgrading. This is the most powerful policy among the structural tax cuts this year. It is expected to reduce taxes by more than 360 billion yuan for enterprises this year, adding to the tax cuts of more than 360 billion yuan last year.
For a detailed interpretation of the new tax policy on super deduction of R&D expenses in 2021, let’s take a look:
1. What is super deduction of R&D expenses: Article 30 of the Corporate Income Tax Law The super deduction of research and development expenses mentioned in item (1) of this article refers to the research and development expenses incurred by an enterprise to develop new technologies, new products, and new processes. On the basis of deduction, an additional deduction of 50% of the research and development expenses will be made; if intangible assets are formed, amortization of 150% of the cost of the intangible assets will be made.
2. What is the concept of increasing from 75 to 100? Taking the manufacturing industry as an example, the previous super deduction ratio for corporate R&D expenses was 75%. That is to say, if an enterprise invests 1 million yuan in research and development expenses, it can actually deduct 1.75 million yuan from the taxable income of corporate income tax, and the enterprise can pay less corporate income tax. Starting from January 1, 2021, if an enterprise invests 1 million yuan in research and development expenses, it can deduct 2 million yuan from its taxable income, which is 250,000 yuan more than before.
3. What are the benefits of reforming the calculation method of super deduction and settlement of R&D expenses: The policy stipulates that enterprises can choose to enjoy the preferential super deduction on a half-year basis. The R&D expenses in the first half of the year will be settled and settled in the next year's income tax settlement. The time-to-time deduction is changed to be deducted when the prepayment is made in October of that year. Shortening the settlement period means that the amount that can be deducted in the current year increases and the cash flow occupied by taxes decreases, which is very beneficial to manufacturing companies. Many manufacturing companies are capital-intensive industries and have heavy financial burdens. This can save cash flow for the company.
4. What expenses are allowed for super deduction? According to the "Announcement of the State Administration of Taxation on Issues Concerning the Scope of the Pre-tax Super Deduction of R&D Expenses" (State Administration of Taxation Announcement No. 40 of 2017), the scope of the pre-tax super deduction of R&D expenses is as follows: (1) Personnel labor costs, It refers to the wages and salaries, basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, work-related injury insurance premiums, maternity insurance premiums and housing provident funds of those who are directly engaged in R&D activities, as well as the labor costs of external R&D personnel. (2) Direct investment costs refer to the materials, fuel and power costs directly consumed by research and development activities; the development and manufacturing costs of molds, process equipment used for intermediate tests and product trial production, and the purchase of samples, prototypes and general testing means that do not constitute fixed assets Fees,
Inspection fees for trial products; operation and maintenance, adjustment, inspection, repair and other expenses for instruments and equipment used for R&D activities, as well as instruments used for R&D activities rented through operating leases, Equipment rental fees. (3) Depreciation expenses refer to the depreciation expenses of instruments and equipment used in research and development activities. (4) Amortization expenses of intangible assets refer to the amortization expenses of software, patents, and non-patented technologies (including licenses, proprietary technologies, designs and calculation methods, etc.) used in research and development activities. (5) New product design fees, new process specification formulation fees, clinical trial fees for new drug development, and field test fees for exploration and development technology, refer to the company’s new product design, new process specification formulation, clinical trials for new drug development, and exploration and development technology fees. Various expenses incurred during the field test and related to carrying out the activity. (6) Other related expenses generally refer to some data fees, technical consulting fees, book fees, etc. The total amount of such expenses shall not exceed 10% of the total R&D expenses that can be deducted.