Pro-enterprise policies such as additional deductions for research and development costs should be fully enjoyed

In recent years, the additional deduction of research and development costs has continued to increase, which has strongly stimulated the innovation vitality of enterprises. During the “13th Five-Year Plan” period, the number of enterprise households nationwide enjoying the policy of additional deduction of R&D expenses increased from 53,000 in 2015 to 339,000 in 2019, an increase of 5.4 times in five years; Tax breaks will be increased from 72.6 billion yuan to 355.2 billion yuan.

Zhang Qilong, statisticians of the Department of Social Science and Culture of the National Bureau of Statistics, pointed out that in 2022, the number of enterprises enjoying the preferential policies of tax reduction and exemption for R&D expenses and high-tech enterprises increased by 16.3% and 11.7% over the previous year, respectively, which effectively encouraged enterprises to increase investment in research and development.

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Since the beginning of this year, the finance and taxation department has increased the pre-tax deduction ratio of research and development expenses of enterprises in eligible industries from 75% to 100%, which is a long-term institutional arrangement. At the same time, enterprises are allowed to enjoy the policy of additional deduction of research and development costs in advance, and the pre-payment declaration period in July of the year is added as the time point to enjoy the policy. According to statistics, in July this year, among the enterprises that have enjoyed the deduction of R&D expenses in advance, the number of private enterprises accounted for 94.3%, more than 290,000 households, and the amount of private enterprises to enjoy the deduction of R&D expenses accounted for 76.6% of the total amount.

Jia Ronge, director of the tax Administration Department of the Ministry of Finance, said that the Ministry of Finance, together with relevant departments, continued to increase support for scientific and technological innovation and implemented a series of targeted preferential tax policies. “In general, a tax support policy system with wide coverage, strong incentives and covering all aspects of the whole process of enterprise innovation has been initially formed.”

Jia Ronge said that in the next step, the Ministry of Finance will work with relevant departments to implement various preferential policies for taxes and fees, continuously consolidate the main position of enterprises in innovation, and continue to improve the international competitiveness of China’s scientific and technological innovation.

Liu Kun, Minister of Finance, said recently that the next step will be to support the strengthening of the real economy. Pro-business policies that encourage innovation, such as additional deductions for research and development costs, should be enjoyed to guide more small and medium-sized enterprises to develop in a new direction of specialization. We will study and deepen reform of the mechanism for allocating and using science and technology funds, and continuously improve the effectiveness of investment in science and technology.