Recently promulgated Chinese tax regulations include following changes affecting corporate income tax:

  • Increase to the unit value of fixed assets eligible for the “one-off deduction method” to RMB 5 million;
  • Increase to the deduction limit for staff education expenses to 8% of total annual payroll;
  • Relief from restrictions on applying the super-deduction on commissioned R&D expenses for R&D activities undertaken by overseas entities;
  • Increase to the super-deduction ratio for R&D expenses to 75%;
  • Permit the carry forward of public welfare donations exceeding the deduction limit to the subsequent 3 years;
  • Expand the types of documents that can be used in supporting deductions under certain circumstances;
  • Clarify the time limit for obtaining supporting documentation for deductions;
  • Provide remedial measures for invalid invoices and “irremediable invoices” due to an “abnormality” of the transaction party;
  • Retroactive deduction of expenses when the relevant supporting documents are only obtained after the filing deadline for the corporate income tax return;
  • Record-filing procedure for enjoying tax incentives;
  • Record-filing of asset losses for deduction purposes; and
  • Extended carry forward period of losses to 10 years for “high and new technology enterprises” (HNTEs) and “high-tech small and medium enterprises” (SMEs) as of 1 January 2018 for losses incurred within five years before obtaining the relevant qualification.