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China: R&D “super deduction” rate 75%, expanded for all enterprises

China: R&D “super deduction” rate of 75% expanded

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.


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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.


Read a July 2018 report prepared by the KPMG member firm in China

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