Recently, the SAT made an announcement on the enterprise income tax policy for those enterprises involved in the accelerated depreciation of fixed assets. For those enterprises in such six sectors as bio-pharmaceutical, special equipment manufacturing, railway, shipbuilding, aerospace, other transport equipment manufacturing, computer, telecom and other electronic equipment manufacturing, instrument and meter manufacturing, information transmission, software and information technology service, their fixed assets, which have been purchased since January 1, 2014, can have the depreciation years shortened as much as 60% of the minimum depreciation years as defined by the Enterprise Income Tax Law, or they can choose to conduct accelerated depreciation according to double declining balance method or sum of the years digit method.
Li Wanpu, Director of Taxation Science Research Institute, said that, “the enterprise income tax policy for those enterprises involved in the accelerated depreciation of fixed assets can reduce the corporate tax burden at the early stage of investment, increased the cash flow, encourage traditional manufacturers to renew and upgrade their production equipment, build their confidence in more investment and help them become bigger and stronger.”
