According to the Notice of State Taxation Administration of The People's Republic of China on Printing and Distributing the Administrative Measures for Pre-tax Deduction of Enterprise Research and Development Expenses (Trial) (Guo Shui Fa [2008]116): "Article 4
Enterprises are allowed to engage in research and development activities of projects specified in the Guide to State-Supported High-tech Fields and Key Areas of High-tech Industrialization with Current Priority (2007) published by the National Development and Reform Commission and other departments, and the following expenses actually incurred in a tax year are added and deducted when calculating taxable income.
(a) New product design fees, new process regulations, technical books and materials directly related to R&D activities, and materials translation fees.
(2) Expenses for materials, fuel and power directly consumed in R&D activities.
(3) Wages, salaries, bonuses, allowances and subsidies of on-the-job personnel directly engaged in R&D activities.
(4) depreciation or lease fees for instruments and equipment specially used for R&D activities.
(5) Amortization expenses of intangible assets such as software, patents and non-patented technologies specially used for R&D activities.
(six) the development and manufacturing expenses of molds and process equipment specially used for intermediate test and product trial production.
(seven) the site test fee for exploration and development technology.
(eight) the demonstration, evaluation and acceptance of research and development results.
Article 6
If the research and development expenses entrusted by the enterprise to other units meet the above conditions, the entrusting party shall deduct them according to the regulations, and the entrusted party shall not add any deductions.
For the entrusted development project, the Trustee shall provide the entrusting party with a detailed account of the R&D project expenses, otherwise, the entrusted development project expenses shall not be deducted. "