Core Viewpoint - The article discusses the upcoming tax reduction policy aimed at encouraging technological innovation in China, particularly through increasing the R&D expense deduction ratio for high-tech enterprises and technology-based SMEs during the "15th Five-Year Plan" period [3][4]. Group 1: R&D Expense Deduction Policy - The R&D expense deduction ratio in China has been progressively increased from 50% in 2017 to 100% in 2023, allowing companies to deduct double their R&D expenses from taxable income [5][6]. - The new policy is expected to raise the deduction ratio for high-tech enterprises and technology-based SMEs from the current 100% to potentially 120% or even higher, incentivizing increased R&D investment [7][8]. - The current international standard for R&D tax incentives shows that countries like the U.S. and Germany offer higher deduction ratios, indicating room for improvement in China's policies [8][9]. Group 2: Importance of Targeting High-Tech Enterprises - High-tech enterprises and technology-based SMEs are crucial for China's innovation system, often facing significant R&D costs and funding shortages [6][10]. - The proposed increase in the deduction ratio is seen as a direct way to reduce tax burdens and enable these companies to allocate more resources to R&D and innovation [6][10]. Group 3: Future Policy Recommendations - Experts suggest that simply increasing the deduction ratio may lead to diminishing returns, and future policies should focus on enhancing the quality of R&D rather than just the quantity [12][13]. - Recommendations include introducing a mechanism for R&D expense increment credits and a patent box system to encourage high-quality patent utilization [12][13]. - There is a call for differentiated deduction ratios based on company size, industry, and R&D intensity, with suggestions for higher ratios for companies with significant R&D investments [13][14]. Group 4: Implementation and Optimization - The article emphasizes the need for simplifying the implementation process of the R&D expense deduction policy to enhance accessibility for companies [14]. - Suggestions include transitioning from prior approval to post-filing management and utilizing big data for monitoring R&D activities, thereby reducing compliance costs [14]. - The importance of establishing clear standards for R&D expense categorization and providing authoritative guidelines is highlighted to ensure consistent application across regions [14][15].

Core Viewpoint - The Chinese government is planning to increase the R&D expense deduction ratio for high-tech enterprises and technology-based SMEs as part of the "14th Five-Year Plan" to encourage innovation and enhance competitiveness in the technology sector [1][2]. Group 1: R&D Expense Deduction Policy - The current R&D expense deduction ratio for high-tech enterprises and technology-based SMEs is 100%, which may be raised to 120% or even higher [1][4]. - The R&D expense deduction policy has evolved since its introduction in 1996, with the ratio increasing from 50% to 75% in 2017, and then to 100% in 2023 [2][3]. - The increase in the deduction ratio is expected to directly reduce the tax burden on these enterprises, allowing them to allocate more resources to R&D and innovation [2][5]. Group 2: International Comparison and Implications - Compared to international standards, China's current 100% deduction is considered moderate, with some countries offering deductions as high as 300% [6][5]. - The proposed increase in the deduction ratio aims to align China's policies with those of developed countries, enhancing the global competitiveness of Chinese technology firms [5][6]. Group 3: Future Policy Recommendations - Experts suggest that future policies should not only focus on increasing the deduction ratio but also on improving the quality of R&D investments [7][8]. - Recommendations include introducing a mechanism for R&D expense incremental credits and considering a tiered deduction system based on R&D intensity and growth rates [8][9]. - There is a call for simplifying the execution process of the R&D expense deduction policy to reduce compliance costs for enterprises [10].

Core Viewpoint - Labor dispatch is a common employment method widely adopted by enterprises, but it involves complex tax issues that can confuse both companies and workers [2]. Group 1: Value-Added Tax (VAT) Treatment - For general taxpayers providing labor dispatch services, VAT is calculated based on the total price and additional fees, using the general taxation method [2]. - General taxpayers can opt for differential taxation, where VAT is calculated on the balance after deducting wages, benefits, and social insurance from the total price [2]. - Small-scale taxpayers also have the option of simplified taxation at a rate of 3% on total price and additional fees, or differential taxation at a 5% rate [3]. - Taxpayers choosing differential taxation cannot issue special VAT invoices for wages and benefits paid to dispatched employees but can issue ordinary invoices [4]. Group 2: Corporate Income Tax Treatment - Small micro-enterprises are defined by specific criteria, including an annual taxable income not exceeding 3 million yuan, a workforce of no more than 300, and total assets not exceeding 50 million yuan [5]. - Expenses incurred from external labor dispatch can be deducted from taxable income, categorized as either labor service expenses or salary and welfare expenses [6]. - R&D expenses can include labor costs for dispatched employees, which are considered as external R&D personnel costs [6][7]. - High-tech enterprises can also include labor costs for dispatched employees in their R&D expense calculations [7]. - Tax incentives are available for employing disabled individuals through labor dispatch, as they are considered employees of the dispatch unit [7].

Core Viewpoint - The article discusses the criteria and regulations regarding taxpayer credit evaluation, specifically under the "Taxpayer Credit Management Measures" issued by the State Administration of Taxation, highlighting situations that do not affect credit evaluation and the evaluation cycle. Group 1: Taxpayer Credit Evaluation Criteria - Taxpayers are not affected in their credit evaluation if they encounter situations such as delays due to tax authority reasons or force majeure, calculation errors without intent, or if they are not penalized by tax authorities for minor violations [1][2]. - The "first violation not punished" policy indicates that if a taxpayer corrects a minor violation promptly and does not cause harm, they will not be penalized, which will not impact their credit evaluation [2]. Group 2: Evaluation Cycle and Participation - The taxpayer credit evaluation cycle is set to one calendar year, and entities that have not completed a full evaluation year since their first tax-related dealings will not participate in the current evaluation cycle [2]. Group 3: Application and Resources - Taxpayers can download the "Taxpayer Credit Re-evaluation (Verification) Application Form" from the State Administration of Taxation and provincial tax authority websites [2].

Core Viewpoint - The article discusses the essential documentation and materials that companies must retain to benefit from the R&D expense super deduction policy, emphasizing the importance of proper record-keeping for tax benefits [9][10][11][12][18][19][20]. Group 1: Basic Documentation for R&D Expense Deduction - Companies must retain two core types of documentation to prove the nature of R&D projects: project plans for self-initiated, commissioned, or collaborative research and the resolution documents from the company's authorized departments regarding project approval [9]. - For R&D activities, documentation related to personnel and assets is crucial, including the organizational structure of the R&D team, a list of R&D personnel, and detailed expense allocation records for personnel and equipment used in R&D [10]. Group 2: Documentation for Centralized R&D Projects - Companies engaged in centralized R&D projects need to maintain a detailed R&D expense settlement report, a breakdown of shared expenses, and documentation of actual profit-sharing ratios [11]. Group 3: Auxiliary Accounting Records - It is necessary to keep an auxiliary ledger for R&D expenses along with a summary table to track and report R&D expenditures accurately [13]. Group 4: Additional Documentation for Commissioned R&D - For commissioned R&D (including overseas), companies must retain additional documents such as registered contracts with domestic R&D entities, payment vouchers, receipts from the recipient, and progress reports of the project [18]. Group 5: Retention Period for Documentation - Companies must keep the R&D expense deduction documentation for a minimum of 10 years, starting from the day after the corporate income tax settlement period ends for the year in which the benefits were claimed [19][20]. Group 6: Policy Reference - The article references the announcement from the National Taxation Administration and the Ministry of Finance regarding the optimization of prepayment declarations for R&D expense super deductions [22].

Core Viewpoint - The article discusses the documentation requirements for companies to enjoy the tax deduction policy for R&D expenses, emphasizing the importance of retaining specific materials to substantiate claims [12][19]. Group 1: Basic Documentation Requirements - Companies must retain two core types of documents to prove the nature of R&D projects: project plans for self-initiated, commissioned, or collaborative research and the resolution documents from the company's authorized departments regarding project initiation [12]. - For R&D activities, documentation related to personnel and assets is crucial, including the composition of specialized R&D teams and lists of personnel involved in R&D activities [13]. Group 2: Documentation for Centralized R&D Projects - Companies engaged in centralized R&D projects need to keep records such as the R&D expense settlement table, detailed expense allocation tables, and actual profit-sharing ratios [15]. Group 3: Auxiliary Accounting Records - Companies should maintain auxiliary accounts for R&D expenses along with summary tables to ensure proper tracking and reporting of R&D expenditures [17]. Group 4: Additional Documentation for Commissioned R&D - When companies commission R&D (including overseas), they must retain additional documents such as registered contracts for domestic commissions and payment vouchers for overseas commissions, along with progress reports on the projects [21]. Group 5: Retention Period and Legal Responsibility - Companies are required to keep the documentation for a minimum of 10 years from the end of the corporate income tax settlement period in which the tax benefits were claimed, and they bear legal responsibility for the authenticity and legality of the retained documents [22].

Core Viewpoint - The article discusses the documentation requirements for companies to enjoy the tax deduction policy for R&D expenses, emphasizing the importance of retaining specific records to substantiate claims [14][21]. Group 1: Basic Documentation Requirements - Companies must retain two core types of documents to prove the nature of R&D projects: project plans for self-initiated, commissioned, or collaborative research and the resolution documents from the company's authorized departments regarding project initiation [14]. - For R&D activities, documentation related to personnel and assets is crucial, including the organizational structure of the R&D team and a list of personnel involved in the R&D activities [15]. Group 2: Centralized R&D Projects - For centralized R&D projects, companies need to keep records such as the R&D expense settlement table, detailed expense allocation tables, and actual profit-sharing ratios [17]. Group 3: Auxiliary Accounting Records - Companies should maintain auxiliary accounts for R&D expenses along with summary tables to ensure proper tracking and reporting of R&D expenditures [19]. Group 4: Additional Documentation for Commissioned R&D - When companies engage in commissioned R&D (including overseas), they must retain additional documents such as registered contracts with domestic R&D entities and payment vouchers for overseas contracts [23]. Group 5: Retention Period and Legal Responsibility - Companies are required to keep the documentation for a minimum of 10 years from the end of the corporate income tax settlement period in which the tax benefits were claimed, and they bear legal responsibility for the authenticity and legality of the retained documents [24].

Group 1 - Nanjing has over 300 AI-related companies, attracting around 50,000 professionals and creating a strong industry cluster effect [1] - The local tax authority has implemented structural tax reduction policies, providing "one-on-one" precise guidance to key AI enterprises, facilitating the direct enjoyment of tax benefits [1] - Companies like AAC Technologies (Nanjing) Co., Ltd. have benefited significantly from tax incentives, with R&D expense deductions freeing up over 3.6 million yuan for technology upgrades [1] Group 2 - Startups have found tax incentives to be crucial, with Jiangsu Zhimeng Intelligent Technology Co., Ltd. receiving nearly 8 million yuan in tax benefits, which greatly supported their initial growth [1] - The Nanjing tax authority focuses on enhancing the precision of policy delivery, ensuring that every enterprise can access the benefits they are entitled to [1] - The R&D expense deduction policy is a key tax incentive for supporting technological innovation, although companies face challenges in accurately categorizing R&D expenses [2] Group 3 - Outermost AI, a company specializing in generative AI and voice interaction, has received over 40 million yuan in tax benefits in 2023 due to precise guidance from the tax authority [2] - The Nanjing tax authority has developed a full-cycle tax service system to support enterprises at different stages of development, combining data analysis with service [2] - Nanjing Yisaiqi Intelligent Technology Co., Ltd. has expanded its R&D center, and the tax authority has proactively provided services to address potential tax issues related to fixed asset deductions and invoice management [3]

Core Viewpoint - The article provides guidance on how to fill out the "Employee Compensation" sections in the new version of the Corporate Income Tax Prepayment Declaration Form (A Class) effective from October 1, 2025, specifically focusing on "Employee Compensation - Included in Cost" and "Employee Compensation - Actual Payments to Employees" [10][11][20]. Group 1: Employee Compensation - Included in Cost - This section requires reporting the total employee compensation that has been accounted for in cost expenses, including salary payments, employee benefits, education expenses, union fees, various social security contributions, housing funds, supplementary pension insurance, and supplementary medical insurance [11][22]. - The data to be filled in this section should reflect the cumulative amount from January to September of the reporting year [14][19]. Group 2: Employee Compensation - Actual Payments to Employees - This section involves reporting the cumulative amount of salary payments recorded under the "Employee Compensation" account, specifically the debit amounts [12][22]. - Similar to the previous section, the data should also represent the cumulative figures from January to September [14][19]. Group 3: Special Cases and Clarifications - For non-independent branches, there is no need to report the "Employee Compensation - Included in Cost" and "Employee Compensation - Actual Payments to Employees" sections [15]. - When a consolidated entity submits the declaration, it must include the total compensation data from both the head office and branches [16]. - The inclusion of one-time severance payments in the "Actual Payments to Employees" section should be determined according to accounting standards [18].

Core Points - The article discusses the calculation and categorization of research and development (R&D) expenses for tax deduction purposes, emphasizing the importance of accurate accounting for various types of costs associated with R&D activities [10][12][14]. Group 1: Types of R&D Expenses - The article identifies five core types of expenses related to R&D, which include personnel costs, direct input costs, depreciation expenses, intangible asset amortization, and design testing fees [3][6][7][12]. - Other related expenses include costs for technical literature, expert consultations, and travel expenses directly associated with R&D activities [8][12]. Group 2: Calculation of Additional Deductions - A hypothetical example illustrates how a technology company can calculate its R&D expenses and the additional deductions available under the policy, using a 100% additional deduction rate [10][13]. - The total R&D expenses are calculated by summing the five core expenses and applying a formula to determine the limit for other related expenses, which is set at 10% of the total core expenses [13]. Group 3: Accounting Requirements - Companies are required to maintain separate accounting for R&D expenses and production costs, ensuring accurate allocation of shared resources [14]. - For collaborative R&D projects, each party must account for their respective expenses according to the project plan and agreements [15]. Group 4: Documentation Requirements - The article outlines a list of documentation that companies must retain for R&D projects, including project plans, personnel lists, and expense allocation records [18][17].