Commissioned R D is deducted according to 80, how to deduct

First, the front. Additional deductions.

80% of the expenses incurred in R&D activities shall be used as the additional deduction base. The expenses incurred by enterprises entrusting external institutions or individuals to carry out R&D activities can be deducted before tax according to regulations.

If an individual is entrusted with R&D, it should be deducted before tax with legal and valid vouchers such as invoices issued by individuals. Among them, the expenses incurred in R&D activities refer to the fees actually paid by the entrusting party to the entrusted party. Regardless of whether the client is entitled to R&D expenses or not.

The pre-tax additional deduction policy is not allowed by the trustee.

2. Analyze the details.

The part of the entrusted overseas R&D expenses that do not exceed two-thirds of the R&D expenses of qualified domestic enterprises can be deducted before the enterprise income tax according to the regulations. This provision is one of the main differences between the policy of additional deduction of entrusted overseas R&D expenses and the entrusted domestic R&D, and the proportion of two-thirds is mainly related to the administrative measures for the recognition of high-tech enterprises.

Convergence of provisions. The Administrative Measures for the Identification of High-tech Enterprises stipulate that the total R&D expenses incurred by enterprises in China shall not be less than 60% of the total R&D expenses of all completed R&D expenses, and the ratio of overseas and domestic R&D expenses is 2:3.

3. What are the main risks of commissioned R&D.

When an enterprise entrusts external R&D, it must pay attention to whether it has the ultimate ownership of the product. The characteristics of the entrusted project are that the R&D funds are at the disposal of the client, the project results must reflect the will of the client and realize the purpose of the client's use, and the results of R&D activities must be owned by the entrusting enterprise and closely related to the main business of the enterprise. If there is no ownership of the product, it does not belong to the scope of R&D expense collection.

Legal analysis: enterprise R&D activities are generally divided into self-excited blind main R&D, commissioned R&D, cooperative R&D, centralized R&D and a combination of the above, the expenses incurred by enterprises entrusting external institutions or individuals to carry out R&D activities shall be included in the entrusting party's research and sales expenses and calculate additional deductions according to 80% of the actual amount of expenses, and the entrusted party shall not make additional deductions, and the entrusted individual R&D shall be deducted before tax with legal and valid vouchers such as invoices issued by individuals.

Legal basis: Article 11 of the Detailed Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection Article 11 The administrative organs for industry and commerce at all levels shall regularly report to the State Administration of Taxation and the local taxation bureaus at the same level on the circumstances of the opening, alteration, cancellation of registration and revocation of business licenses. The specific measures for notification shall be jointly formulated by the State Administration of Taxation and the State Administration for Industry and Commerce.

Legal analysis: If the R&D expenses actually incurred by manufacturing 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, 2021 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, 2021.

Legal basis: Article 1 of the Announcement on Further Improving the Pre-tax Deduction Policy for R&D Expenses stipulates that if the R&D expenses actually incurred by manufacturing 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, 2021 on the basis of deduction according to the regulations; If intangible assets are formed, they will be amortized before tax at 200% of the cost of intangible assets from January 1, 2021.

For the purposes of this article, the term "manufacturing enterprises" refers to enterprises with manufacturing business as their main business and the proportion of their main business income in the total income in the year of preferential treatment reaches more than 50%. The scope of the manufacturing industry shall be determined in accordance with the Industrial Classification of the National Economy (GB T4574-2017), if the relevant state departments update the Industrial Classification of the National Economy, from its provisions. The total income shall be implemented in accordance with Article 6 of the Enterprise Income Tax Law.

First, the front. The expenses incurred by the enterprise in entrusting external institutions or individuals to carry out R&D activities shall be included in the R&D expenses of the entrusting party according to 80% of the actual amount of expenses.

and calculate the additional deduction.

The trustee shall not make any additional deductions. The actual amount of the entrusted external R&D expenses shall be determined in accordance with the arm's length principle. The entrusting party is related to the entrusted party.

The entrusted party shall provide the entrusting party with a detailed description of the R&D project expenses.

2. Analysis. The R&D expenses incurred in the development of new technologies, new products and new processes in accordance with relevant regulations can be calculated in the calculation of the taxable residual income.

It is clarified that the additional deduction of R&D expenses refers to the R&D expenses incurred by enterprises for the development of new technologies, new products and new processes, and do not form intangible assets.

If it is included in the profit or loss for the current period, it shall be deducted according to 75% of the research and development expenses on the basis of deduction according to the provisions of the regulations. If an intangible asset is formed, it shall be amortized at 175% of the cost of the intangible asset. In other words, according to whether the research expenses are capitalized or not, there are two ways to add deductions, but they are allowed to be deducted before tax.

The total amount is the same, i.e. 175% of the actual R&D expenses incurred. High-tech enterprises can enjoy this preferential tax policy.

3. Can commissioned R&D be used as the main business cost?

If the R&D expenses are separately approved, they should be temporarily included in the special expenditure, and will be dealt with according to the situation after the completion of the project: the intangible assets that form intangible assets should be included in the intangible assets. If it does not meet the standard of intangible assets, it can be included in the development expenses at one time.

If the R&D expenses actually incurred by an enterprise in carrying out R&D activities are not included in the profit or loss of the current period as intangible assets, they shall be deducted from the taxable income of the current year according to 75% of the actual amount incurred in the current year on the basis of deduction according to the regulations.

Article 1 of the 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 (CS 2018 No. 99).

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, during the period from January 1, 2018 to December 31, 2020, 75% of the actual amount will be deducted before tax in Mingzhengshen; If an intangible asset is formed, it shall be amortized before tax at 175% of the cost of the intangible asset during the liquidation period mentioned above.