The Circular on Improving the Policy on Extra Pre-tax Deduction of Research and Development Expenses (the "Circular") would be taken into effect on 1 January 2016
In order to encourage the domestic R&D, recently, the Ministry of Finance, SAIC, the Ministry of Science and Technology have jointly promulgated the “Circular”. Based on No.116 GUO SHUI FA [2008] and No.70 CAI SHUI [2003] (hereinafter refer to the “Old Policies”), the “Circular” has further prescribed the requirements on the details of the expenses and the control on the amortization of the expenses, which mainly includes: To expand the scope of the items which could be deducted The scope of R&D: the “Circular“has prescribed the “negative list”, in which it has sets out the activities and industries to which…