The Ministry of Finance ("MOF") and the State Taxation Administration ("STA") jointly published on March 26, 2023 the Announcement on Further Improving the Policy of Extra Tax Deduction for Research & Development Expenses, effective January 1, 2023.
"Announcement" makes it clear that for the actual R&D expenses which enterprises actually incurred in the R&D activities, enterprises can enjoy additional 100% deduction for taxable income if the R&D expenses do not form intangible assets but go into the current profit and loss; enterprises can amortize the intangible assets at 200% of its cost if the R&D expenses are formed into intangible assets. The announcement is valid from January 1, 2023.