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.