Additional deductions can be made for entrusting individuals with research and development.
Expenses incurred by an enterprise entrusting external institutions or individuals to carry out R&D activities can be deducted according to the prescribed pre-tax deduction calculation based on 80% of the expenses incurred in R&D activities as the base for super deduction. If an individual is entrusted with research and development, additional pre-tax deductions shall be made based on legal and valid certificates such as invoices issued by the individual. The expenses incurred in R&D activities refer to the expenses actually paid by the entrusting party to the entrusted party.
Additional deduction refers to a preferential tax measure that, in accordance with the provisions of the tax law, adds a certain proportion to the actual amount and uses it as the deduction amount when calculating taxable income. Simply put, it is the amount of actual expenditure. When calculating corporate income tax, it can be calculated as an amount higher than the actual expenditure. Because corporate income tax is calculated based on profit, and profit = income - expenditure, if multiple columns of expenditures are allowed, then corporate income tax will be reduced.
Scope of R&D expenses that allow super deduction
1. Labor expenses: including wages, allowances, bonuses, social insurance premiums, etc. of R&D personnel.
2. Direct investment costs: including direct investment costs for materials, fuel, power, experimental equipment, etc. required for research and development activities.
3. Depreciation expenses: including depreciation expenses of instruments, equipment and buildings used for research and development activities.
4. Amortization expenses of intangible assets: including amortization expenses of intangible assets such as patent rights, non-patented technologies, and trademark rights used in research and development activities.
5. Other related expenses: including conference fees, travel expenses, consulting fees, etc. related to R&D activities. The total amount of this expense shall not exceed 10% of the total R&D expenses that can be super-deducted.
Reference for the above content: Baidu Encyclopedia - Super Deduction