China’s Premier Li Keqiang on 23 July 2018 announced that the 75% “super deduction” rate for eligible research and development (R&D) expenses will be available for all enterprises going forward.
Currently, the 75% super deduction rate is available only for science and technology-related small- and medium-sized enterprises (SMEs).
The R&D expenses super deduction incentive has been available for a 10-year period, since 2008. In recent years, access to the incentive has been progressively expanded. For instance, prior project verification and record-filing requirements are no longer required.
Expenses eligible for the super deduction have also been expanded to cover R&D outsourcing expenses—both for domestic and foreign contractors—and stock option expenses. The super deduction rate was increased from 50% to 75% for science and technology-related SMEs in 2017. That increased rate is now expanded for all enterprises.
Read a July 2018 report prepared by the KPMG member firm in China
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.