China News Service, Beijing, October 8 (Reporter Zhao Jianhua) In recent years, the state has continued to increase the proportion of super deductions for R&D expenses, and the innovation investment of various business entities has continued to grow. However, many taxpayers do not fully understand the scope of application, conditions for enjoyment, and reporting rules of super deductions for R&D expenses. They fail to fully understand the policy requirements and miss out on tax dividends. Experts remind us that there are "three major misunderstandings" when applying the super deduction policy for R&D expenses: not only high-tech enterprises and technology-based small and medium-sized enterprises can enjoy it; regardless of profit and loss status, compliant enterprises can apply for super deduction normally; the policy supports R&D activities themselves, and obtaining R&D results is not a necessary condition.
The policy of super deduction of R&D expenses is an inclusive support for resident enterprises and is not limited to two types of business entities: high-tech enterprises and technology-based small and medium-sized enterprises. "The super deduction of R&D expenses, tax incentives for high-tech enterprises, and special industry support subsidies are different policy tools. The positioning, goals, and access rules are independent of each other. Enterprises do not need to obtain the qualifications of high-tech and technology-based small and medium-sized enterprises. As long as they meet the financial and tax management requirements, they can declare and enjoy it." Guan Yonghao, Dean of the School of Finance and Taxation of Nanjing University of Finance and Economics, said.
Guan Yonghao pointed out that the policy of super deduction of R&D expenses has set up a negative list of industries in conjunction with the orientation of industrial development. Enterprises in tobacco manufacturing, accommodation and catering industries, wholesale and retail industries, real estate industry, leasing and business services, entertainment industry and other industries are not within the scope of preferential application.
The policy of super deduction of R&D expenses does not use the company's annual operating profit and loss as the threshold for enjoyment. Both profitable and loss-making companies can enjoy the preferential treatment in accordance with the regulations. According to the Enterprise Income Tax Law, the calculation logic of an enterprise's annual taxable income is the total annual income minus non-taxable income, tax-free income, deductions for various costs and recoverable losses in previous years. As long as the R&D expenditures are genuine and compliant, the company can enjoy the super deduction of R&D expenses regardless of whether it makes operating profits or losses in the current year.
Wang Liangliang, a professor at the School of Business of Nanjing University, said that for loss-making enterprises, the amount of losses that can be compensated for the current year after declaring super deductions will be increased accordingly. The increased loss amount can be carried forward to make up for subsequent tax years in accordance with regulations, continuously reducing the corporate income tax burden in subsequent years, releasing the tax reduction effect in the long term, and continuing to alleviate the pressure on corporate innovation funds.
R&D activities are naturally characterized by long cycles, high risks, and unpredictable results. The original intention of the policy design is to encourage companies to proactively carry out technological research, rather than just rewarding successful R&D projects. Judging from the application practice, most R&D projects are implemented across multiple years. The policy allows companies to simultaneously declare super deductions in the year when R&D expenses are actually incurred. There is no need to wait for the project to be fully completed and the results to be produced before applying for discounts. Enterprises cannot predict the final results of the project in the current reporting period, and the quality of the results will not affect the enjoyment of discounts.
Cao Xun, executive director of the Brain-Computer Interface Research Institute of Nanjing University, said that when it comes to whether to enjoy the super deduction of research and development expenses, many scientific research teams and scientific and technological innovation companies are prone to fall into the misunderstanding of "self-imposed restrictions". They always feel that the policy threshold is high and the procedures are complicated, or they are worried that they will miss the policy if they are in the early stage of research and development. In fact, as long as it meets the definition of R&D activities and meets the conditions for super deduction, you can still enjoy super deduction even if the R&D fails.
