The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") released the Announcement on Continuing the Policy for Deduction of Corporate Income Tax for Purchase of New Equipment and Instruments, clarifying that the policy will continue to be implemented from January 1, 2024 to December 31, 2027.
According to the Announcement, enterprises that purchase new equipment and instruments worth of no more than 5 million yuan during the period from January 1, 2024 to December 31, 2027 are allowed to include the full purchase cost in the cost and expense for the current period and make one-off deduction in calculation of their taxable income, and depreciation of the cost on a yearly basis will be cancelled. Where the purchase is worth of over 5 million yuan, the pre-tax deduction shall still be subject to the Regulations for the Implementation of the Corporate Income Tax Law, the MOF and STA No.75 (2014) document, and the MOF and STA No.106 (2015) document.
Source: Announcement of the State Taxation Administration