R&D expenses mainly include various expenses incurred by enterprises in the research and development process of products, technologies, materials, processes, and standards. The details are as follows:
1. Direct consumption of R&D activities materials, fuel and power costs.
2. Salaries, bonuses, allowances, subsidies, social insurance premiums, housing provident funds and other labor costs for the company’s current R&D personnel, as well as labor costs for external R&D personnel.
3. Depreciation or leasing fees for fixed assets such as instruments, equipment, and buildings used for R&D activities, as well as operation, maintenance, repair and other expenses for related fixed assets.
4. Amortization expenses of intangible assets such as software, patent rights, and non-patented technologies used in research and development activities.
5. Development and manufacturing fees for molds and process equipment used for intermediate testing and product trial production, equipment adjustment and inspection fees, purchase fees for samples, prototypes and general testing methods, inspection fees for trial production products, etc.
6. Demonstration, review, acceptance and evaluation of R&D results, as well as application fees, registration fees, agency fees and other fees for intellectual property rights.
7. Fees paid for entrusting or cooperating with other units or individuals to conduct research and development through outsourcing, cooperative research and development, etc.
8. Other expenses directly related to R&D activities, including technical book materials fees, data translation fees, conference fees, travel expenses, office expenses, foreign affairs expenses, R&D personnel training fees, training fees, and expert consulting fees , high-tech R&D insurance expenses, etc.
Treatment of R&D expenses
my country’s accounting standards divide the treatment of R&D expenses into two parts: first, expenses incurred in the research stage and expenses that cannot be distinguished between R&D expenditures in the research stage and R&D in the development stage. All expenditures are expensed; secondly, expenditures in the development phase of internal research and development projects of the enterprise, expenditures that can prove that they meet the conditions of intangible assets are capitalized and amortized in installments.
As mentioned earlier, the "Enterprise Income Tax Law of the People's Republic of China" handles the requirements for R&D expenses in two situations: "Research conducted by enterprises to develop new technologies, new products, and new processes" If development expenses do not form intangible assets and are included in the current profit and loss, on the basis of actual deductions in accordance with regulations, an additional deduction of 50% of the research and development expenses will be made; if intangible assets are formed, they will be amortized at 150% of the cost of the intangible assets." It can be seen that in terms of the treatment of research expenses, the accounting treatment and tax deduction regulations in my country's practical circles are also inconsistent.
Reference for the above content: China National People’s Congress Network-Enterprise Income Tax Law of the People’s Republic of China