How do enterprises deduct input tax in R&D activities?

There is a large industrial enterprise in dengzhou city, Henan Province, which mainly produces automobile locks and has a research and development center. The developed technology is mainly used in the production of automobile locks in this enterprise. Recently, the local State Taxation Bureau found that the company transferred a patented technology developed and used by itself to another company, with a profit of 2 million yuan, and the book development cost of the patent was 6,543,800 yuan. The enterprise has paid the business tax according to the regulations and declared it as the taxable income of enterprise income tax. However, the financial officer was uncertain about the handling of VAT, so he asked the tax officer how to handle the VAT in this business. The input tax of normal R&D expenditure of an enterprise can be deducted in accordance with the Accounting Standards for Business Enterprises No.6-Intangible Assets, and the expenditure of R&D projects within an enterprise should be distinguished from the expenditure in the research stage and the development stage. Expenditures in the research phase of internal research and development projects shall be included in the current profits and losses when incurred. Expenditures in the development stage of internal research and development projects can only be recognized as intangible assets if the following conditions are met: (1) It is technically feasible to complete the intangible assets so that they can be used or sold; (2) There is an intention to complete the intangible asset and use or sell it; (3) The way in which intangible assets generate economic benefits, including being able to prove that the products produced by using the intangible assets exist in the market or that the intangible assets themselves exist in the market, and that the intangible assets will be used internally and prove their usefulness; (4) Having sufficient technical, financial and other resources to support the development of the intangible assets, and having the ability to use or sell the intangible assets; (5) Expenditure attributable to the development stage of the intangible assets can be reliably measured. According to the actual situation of financial accounting and R&D projects, enterprises can make R&D expenses profitable or capitalized. Article 8 of the Provisional Regulations on Value-added Tax stipulates that the value-added tax paid or borne by taxpayers for purchasing goods or accepting taxable services is the input tax. Article 10 stipulates that the input tax of the following items shall not be deducted from the output tax: (1) Goods purchased or taxable services used for non-VAT taxable items, VAT-exempt items, collective welfare or personal consumption; (2) Abnormal losses of purchased goods and related taxable services; (3) Goods purchased or taxable services consumed by products in process and finished products with abnormal losses; (four) consumer goods for taxpayers' own use as prescribed by the competent departments of finance and taxation of the State Council; (five) the transportation costs of goods and the transportation costs of selling duty-free goods as stipulated in items (1) to (4) of this article. Expenditure on R&D activities shall be deducted if it does not fall within the scope that the above input tax cannot be deducted. Therefore, R&D expenditures normally included in the current expenses and technical expenditures that form intangible assets for the continuous production and use of enterprise products can be deducted from the output tax. The input tax on the sale of intangible assets by enterprises should be transferred from the R&D activities carried out by enterprises to develop new products or research new technologies. Input tax is generally generated in the following behaviors: raw materials, tools and low-value consumables used in R&D activities, water, electricity, fuel and power consumed in R&D activities; Machines and equipment purchased for R&D activities. Article 10 of the Provisional Regulations on Value-added Tax stipulates that the input tax amount of non-VAT taxable items shall not be deducted from the output tax amount, and the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax stipulates that the non-VAT taxable items mentioned in Article 10 of the Regulations refer to providing non-VAT taxable services, transferring intangible assets, selling real estate and real estate projects under construction. Therefore, the intangible assets developed and sold by enterprises cannot be deducted from the input tax, and enterprises should transfer the corresponding input tax according to the reliable and measurable cost composition of intangible assets.