On March 24, the executive meeting of the State Council was held to implement policies such as increasing the proportion of R & D expenses plus deduction of manufacturing enterprises, so as to encourage enterprise innovation and promote industrial upgrading.

       In recent years, the tax preferential policy of R & D expense deduction has been increasing, which has effectively promoted enterprise innovation. In order to implement the relevant measures of the government work report to support enterprise innovation, the meeting decided to increase the deduction proportion of R & D expenses of manufacturing enterprises from 75% to 100% from January 1 this year, which is equivalent to 2 million yuan deduction from taxable income for every 1 million yuan of R & D expenses invested by enterprises. With the implementation of this policy, it is estimated that on the basis of tax cuts of more than 360 billion yuan last year, another 80 billion yuan will be cut for enterprises this year. This institutional arrangement is the most powerful policy in this year’s structural tax reduction.

The meeting also proposed to reform the accounting method of R & D expenses, allowing enterprises to choose to enjoy the preferential treatment of R & D expenses by half a year. The R & D expenses in the first half of the year can be deducted from the income tax final settlement of the next year to the prepayment in October of that year, so that enterprises can benefit as soon as possible. At the same time, we should study the tax support policies for technology R & D service enterprises and “innovation and entrepreneurship” enterprises.

Pan Baochun, chairman of Hefei Rongshida Electronic Appliance Group Co., Ltd., said that since 2014, the enterprise has invested more than 48 million yuan in R & D funds, and enjoyed more than 23 million yuan in the benefits of high-tech enterprise income tax and R & D expenses deduction. He said that preferential tax policies such as R & D expense deduction have been further strengthened, which has stimulated the determination of enterprises to increase investment in innovation.

“Policies and measures such as increasing the deduction ratio of R & D expenses of manufacturing enterprises fully reflect the determination of the state to support the development of the real economy, and provide a solid guarantee for the innovation and R & D of enterprises, especially small and medium-sized enterprises. It is necessary to ensure that the main body of the market should enjoy it and let the enterprise’s innovation vitality fully surge. ” Ma Bin, full time vice president of China Association of small and medium sized enterprises, said.

(Xinhua news agency, China Construction Machinery Industry Association)