ANNOUNCEMENT 02 May 2017
May 2nd, 2017 - China's Ministry of Finance announced that the super deduction scheme for expenses incurred by R&D firms would be increased for SMEs.
NUMBER OF INTERVENTIONS
PRC Ministry of Finance, May 5th 2017. (财税〔2017〕34号：关于提高科技型中小企业研究开发费用税前加计扣除比例的通知)
On the 5 May, 2017, the PRC Ministry of Finance announced that 'super deductions' on certain R&D expenses would be increased for firms classified as 'technology-based SMEs' (TSMEs) from 150% to 175% between 2017 and 2019, if they develop an intangible asset (i.e. some kind of proprietary intellectual property).
If no such asset is developed, a 75% deduction is still possible.
Larger firms are still eligible for the 150% deduction.
Details of eligible firms and deductible activities were laid out in 2015 (see related act). Further requirements for qualification as a TSME were released the day after this announcement in GuoKeFaZheng 2017/115. The requirements are broadly similar to the ones from the 2015 measure, with a focus on small, independent innovative firms.