• Service: Tax
  • Type: Publication series, Regulatory update
  • Date: 11/14/2013

Scope of R&D Expenses Eligible for Super Deduction Enlarged 

China Tax Alert - Issue 31, November 2013


The Ministry of Finance (MOF) and the State Administration of Taxation (SAT) jointly issued Circular 70 to broaden the scope of research and development (R&D) expenses that are eligible for super deduction. 

SAT issued Circular 116 on 10 December 2008, which specifies definitions of R&D activities, eligible enterprises, scope of expenses, accounting requirements and tax administration for R&D expense super deduction purposes. Circular 116 outlines eight types of R&D expenses that are eligible for super deduction, but certain expenses that are directly related to R&D activities are excluded. To encourage enterprises to engage in R&D activities, Circular 70 broadens the scope of R&D expenses that are eligible for super deduction, allowing enterprises to benefit from greater tax savings under the super deduction regime.


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