Four authorities including the Ministry of Finance released the Announcement on Raising the Additional Deduction Proportion of R&D Expenses for Integrated Circuit Enterprises and Industrial Machine Tool Enterprises, with retroactive effect on January 1, 2023.
For actual R&D expenses incurred by integrated circuit ("IC") enterprises and industrial machine tool enterprises in their R&D activities, if they have not generated intangible assets or included the same in the current profits and losses, the expenses can be deducted before tax as per 120 percent of the actually incurred costs during the period from January 1, 2023 to December 31, 2027 on the basis of the actual deduction. In the case that they have generated intangible assets, the expenses can be amortized before tax as per 220 percent of the costs of the intangible assets during the said period, said the Announcement, which also clarifies the scopes of IC enterprises and industrial machine tool enterprises, requiring implementation of the relevant provisions of the MOF and STA No.119 (2015) and MOF and STA No.64 (2018) documents for other policy requirements.