Can only technology based SMEs enjoy the 75 R D expenses plus deduction tax incentives?

Enterprises eligible for additional deduction of R&D expenses can enjoy a 75% additional deduction policy from January 1, 2018 to December 31, 2020.

At present, there is no restriction on whether an enterprise is a technology-based small and medium-sized enterprise.

Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Increasing the Pre-tax Deduction Ratio of R&D Expenses.

Cai Shui 2018 No. 99.

1. If the R&D expenses actually incurred by the enterprise in R&D activities are not included in the current profit or loss as intangible assets, on the basis of deduction according to the regulations, 75% of the actual amount will be deducted before tax during the period from January 1, 2018 to December 31, 2020; If an intangible asset is formed, it shall be amortized before tax at 175% of the cost of the intangible asset during the above-mentioned period.

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According to the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on increasing the pre-tax deduction of research and development expenses.

The Notice on the Proportion (Cai Shui 2018 No. 99) shows that the actual R&D expenses incurred by enterprises in carrying out R&D activities.

No intangible assets are formed.

If it is included in the current profit or loss, on the basis of deduction according to the regulations, during the period from January 1, 2018 to December 31, 2020, 75% of the actual amount will be deducted before tax; If an intangible asset is formed, it shall be amortized before tax at 175% of the cost of the intangible asset during the above-mentioned period.

Therefore, after 2018, there is no mandatory requirement that enterprises can enjoy the 75% additional deduction policy for R&D expenses only after they successfully apply for technology-based SMEs.

High-tech enterprises can enjoy this policy, and the policy for small and medium-sized science and technology enterprises is later opened, and now it is said that as long as the technology enterprises have R&D projects, they can be deducted accordingly.

First, the front. In 2022, the additional deduction ratio of R&D expenses for small and medium-sized technology-based enterprises will be 100%. 100% of the actual amount incurred shall be deducted before tax, and if intangible assets are formed, 200% of the cost of intangible assets shall be amortized before tax.

2. Analyze the details.

The additional deduction ratio of R&D expenses for small and medium-sized technology-based enterprises will be increased to 100%, so 100 yuan of R&D expenses will be able to enjoy a pre-tax deduction of 2 million yuan, which is 250,000 yuan more than before. Increasing the additional deduction ratio of small and medium-sized technology-based enterprises to 100% is conducive to promoting the technological progress of technology-based small and medium-sized service enterprises and promoting the scientific and technological progress in China's service industry. The additional deduction of R&D expenses refers to the R&D expenses incurred by an enterprise for the development of new technologies, new products and new processes, which can be added and subtracted by a certain percentage on the basis of the actual amount of expenditure when calculating the taxable income, and can be used as the deduction amount when calculating the taxable income.

Policies such as increasing the proportion of additional deductions for R&D expenses of small and medium-sized technology-based enterprises and expanding the refund of VAT credits at the end of the period have a great effect on reducing the tax burden of small and medium-sized enterprises.

3. What are the similarities between the additional deduction of R&D expenses and the actual deduction of R&D expenses?

The similarities between the additional deduction of R&D expenses and the deduction of R&D expenses are:

1. The applicable objects are the same. It is suitable for enterprises with sound financial accounting and can accurately collect R&D expenses;

2. The characteristics of R&D activities are the same. It is a research and development activity with a clear goal that is continuously carried out by enterprises to obtain science and technology;

3. R&D expenses are treated in the same way. The principle of expense and capitalization of R&D expenditure actually incurred by an enterprise shall be implemented in accordance with the provisions of the financial accounting system;

4. The scope of expenses prohibited from pre-tax deduction is the same. Expenses and expenses that are not allowed to be deducted before tax according to administrative regulations and the State Administration of Taxation are also not allowed to be deducted;

5. The accounting requirements are basically the same. If the enterprise does not set up a special R&D institution or the R&D institution of the enterprise undertakes production and operation tasks at the same time, the R&D expenses and production and operation expenses shall be accounted for separately, and the R&D expenses shall be accurately and reasonably calculated.

For small and medium-sized technology-based enterprises, can the R&D expenses incurred in the process of R&D activities enjoy pre-tax deduction?

Can technology-based SMEs enjoy additional deductions for R&D expenses?

According to the "Notice on Increasing the Proportion of Pre-tax Deduction of R&D Expenses" (CS 2018 No. 99), it is stipulated that:

1. If the R&D expenses actually incurred by the enterprise in R&D activities are not included in the current profit or loss as intangible assets, they shall be deducted before tax according to 75% of the actual amount during the period from January 1 to December 31, 2018 on the basis of deduction according to the regulations; If an intangible asset is formed, it shall be amortized before tax at 175% of the cost of the intangible asset during the above-mentioned period.

2. Other policies and management requirements for enterprises to enjoy the pre-tax additional deduction policy for R&D expenses shall be in accordance with the Notice of the Ministry of Finance and the Ministry of Science and Technology of the State Administration of Taxation on Improving the Pre-tax Deduction Policy for R&D Expenses (Cai Shui [2015] No. 119), the Notice of the Ministry of Finance and the Ministry of Science and Technology of the State Administration of Taxation on Policy Issues Concerning the Pre-tax Additional Deduction of Overseas R&D Expenses Entrusted by Enterprises (Cai Shui [2018] No. 64), The announcement of the State Administration of Taxation on issues related to the policy of pre-tax deduction of enterprise research and development expenses (Announcement No. 97 of 2015 of the State Administration of Taxation) and other documents shall be implemented.

Accounting treatment of enterprise R&D expenses.

Research phase (the intangible assets standard stipulates that all expenditures incurred during the research phase are expensed).

Borrow: R&D expenditures – items (material costs, labor costs, utility costs, lease fees, interest expenses, etc.).

Credit: cash in hand (bank deposits, salaries payable, raw materials, etc.).

2. Purchase of assets:

Borrow: Fixed Assets – Assets (purchase of equipment that does not need to be installed).

Credit: cash on hand (bank deposits).

3. End of period**

Borrow: Administrative Expenses - Research and Development Expenses.

Credit: R&D Expenditures – Projects (material costs, labor costs, utility costs, lease fees, interest expenses, etc.).

Second, the development stage (the expenditure that meets the conditions for the recognition of intangible assets should be capitalized to form assets, otherwise it should be expensed).

Borrow: R&D expenditures – items (material costs, labor costs, utility costs, lease costs, interest expenses, etc.).

Fixed assets – Assets (purchased equipment that does not need to be installed).

Credit: cash in hand (bank deposits, salaries payable, raw materials, etc.).

2. When the development project is completed:

Borrow: Intangible Assets — Assets (capitalized portion).

Administrative expenses – research and development expenses (expensed component).

Credit: R&D Expenditures – Projects (material costs, labor costs, utility costs, lease fees, interest expenses, etc.).

In the previous article, we talked about labor-oriented enterprises, which use population as the main technology to obtain the share and profit of cheap labor, which is the most important representative of manual enterprises. Next, we will talk about how technology-based small and medium-sized enterprises develop, and in the process of development, they can also enjoy R & D expenses. So how can technology-based small and medium-sized enterprises enjoy the additional deduction policy for R&D expenses?

Let's take a closer look at it. <>

First of all, we have to make it clear what is included in the small and medium-sized enterprises of science and technology, first of all, the main staff of small and medium-sized enterprises are engaged in scientific research and technology, which includes the latest scientific research, as well as the planning and production of product development and production lines, and even the sales of the back-end operation department as a whole new technology company. <>

Because this kind of company is still at the forefront of scientific and technological development, but the cost of the overall Yunqi clan camp must be borne by the founder and the corresponding team, so the risk is huge, which is also the reason why many people are reluctant to engage in technology-based entrepreneurship. However, with the blessing of R&D expenses, many talented scientific and technological personnel are more courageous to carry out scientific and technological innovation. <>

In the process of development or operation of the enterprise, if there is a specific consumption content in R&D, that is, the cost of quiet fraud, it can be counted as one of the intangible assets, and these expenses can be exempted from taxes at a rate of 75%. In this way, it has greatly increased the enthusiasm of many innovative companies to start a business, because in the process of research and development, most of the expenses and taxes are exempted, and the overall company's operation direction can invest more expenses in research and development. This also creates a positive cycle.

Because only good R&D and innovative products can gain a foothold in the market, for the operating company, greatly reducing the cost will promote the price of its entire product line to be lowered, and it is also more conducive to promoting sales in the market.

First of all, it is necessary to make full use of this policy to innovate their own projects, so as to better get the injection of funds.

OK. Policy basis: (1) Notice on Increasing the Pre-tax Deduction Ratio of R&D Expenses (CS 2018 No. 99):

1. If the R&D expenses actually incurred by the enterprise in R&D activities are not included in the current profit or loss as intangible assets, on the basis of deduction according to the regulations, 75% of the actual amount will be deducted before tax according to the period from January 1, 2018 to December 31, 2020; If an intangible asset is formed, it shall be amortized before tax at 175% of the cost of the intangible asset during the above-mentioned period.

2. Other policies and management requirements for enterprises to enjoy the pre-tax additional deduction policy for R&D expenses shall be in accordance with the Notice of the Ministry of Finance and the Ministry of Science and Technology of the State Administration of Taxation on Improving the Pre-tax Deduction Policy for R&D Expenses (CS 2015 No. 119), the Notice of the Ministry of Finance and the Ministry of Science and Technology of the State Administration of Taxation on Issues Concerning the Pre-tax Deduction of Overseas R&D Expenses Entrusted by Enterprises (CS 2018 No. 64), The announcement of the State Administration of Taxation on issues related to the policy of pre-tax deduction of enterprise research and development expenses (Announcement No. 97 of 2015 of the State Administration of Taxation) and other documents shall be implemented.

Additional deduction policy for R&D expenses of small and medium-sized technology-based enterprises

Enjoy the main body] technology-based small and medium-sized enterprises.

Preferential content] If the R&D expenses actually incurred by small and medium-sized technology-based enterprises in R&D activities are not included in the current profit or loss as intangible assets, they will be deducted before tax according to 100% of the actual amount from January 1, 2022 on the basis of deduction according to the regulations; If an intangible asset is formed, it will be amortized before tax at 200% of the cost of the intangible asset from January 1, 2022.

Conditions of Enjoyment] 1The conditions and management measures for small and medium-sized science and technology enterprises shall be issued in accordance with the "Ministry of Science and Technology, the Ministry of Finance, the Ministry of Finance, and the State Administration of Taxation.

(Guo Ke Fa Zheng 2017 No. 115) implementation.

2.Other policy caliber and management requirements for small and medium-sized technology-based enterprises to enjoy the pre-tax deduction policy for R&D expenses shall be implemented in accordance with the relevant provisions of the Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Improving the Pre-tax Deduction Policy for R&D Expenses (CS 2015 No. 119) and the Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Policy Issues Concerning the Pre-tax Deduction of Overseas R&D Expenses Entrusted by Enterprises (CS 2018 No. 64) and other documents.

Policy basis] Announcement of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Further Increasing the Pre-tax Deduction Ratio of R&D Expenses of Small and Medium-sized Technology-based Enterprises (No. 16 [2022]).