The Chinese Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology issued a circular (Cai Shui  No. 99) about the super deduction for research and development activities (R&D).
The new circular introduced two scenarios concerning the deduction of R&D expenses. For the R&D activities which have not formed an intangible property and the related expenses are recorded into the current profits and losses, the enterprise undertaking such activities may additionally deduct 75% of the actual expenses for the corporate income tax purposes. This tax incentive is applicable for these R&D expenses incurred during January 1 2018 and December 31 2018. For those which have formed the intangibles, the amortization base of such intangibles may be 175% of the actual costs in the same period.
This circular is not the first tax incentive the three departments jointly issued about the R&D activities this year. On 25 June 2018, they announced new rules regarding the super deduction for R&D expenses incurred by foreign organizations in Circular Cai Shui  No. 64. Other policy scopes and requirements of the super deduction for R&D expenses should follow Circular Cai Shui  No. 119, and State Administration of Taxation Announcement No. 97 of 2015