Corporate income tax common 11 expense deduction ratio, a clear article! _Policy Information_Notice Announcement

1. reasonable wage and salary expenses

Reasonable wage and salary expenses incurred by the enterprise are allowed to be deducted.

Policy basis:Article 34 of the Regulations on the Implementation of the the People's Republic of China Enterprise Income Tax Law (Order No. 714 of the State Council)

2. employee welfare expenses

The employee welfare expenses incurred by the enterprise shall not exceed 14% of the total wages and salaries, and shall be allowed to be deducted.

Policy basis:Article 40 of the Regulations on the Implementation of the the People's Republic of China Enterprise Income Tax Law (Order No. 714 of the State Council)

3. staff education funds

1. General deduction ratio

The part of the employee education expenditure incurred by the enterprise that does not exceed 8% of the total wages and salaries is allowed to be deducted when calculating the taxable income of the enterprise income tax.

Policy basis:Notice of the Ministry of Finance and the State Administration of Taxation on the Policies for the Pre-tax Deduction of Enterprise Employee Education Funds (No.51 [2018] of the Ministry of Finance)

2. Deduction ratio of enterprises in some specific industries

(1) The staff training expenses of integrated circuit design enterprises and qualified software enterprises shall be accounted for separately and deducted in the calculation of taxable income according to the actual amount incurred.

Policy basis:Article 6 of the Notice of the Ministry of Finance and the State Administration of Taxation on Enterprise Income Tax Policies for Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry (No.27 [2012] of the Ministry of Finance)

(2) The training expenses incurred by nuclear power generation enterprises to train nuclear power plant operators can be deducted before tax as the cost of power generation of the enterprise. Enterprises should strictly distinguish between the training expenses of nuclear power plant operators and the staff education expenses of employees, and calculate them separately. The actual expenses of staff education expenses incurred by employees shall not be included in the training expenses of nuclear power plant operators and deducted directly.

Policy basis:Article 4 of the Announcement of the State Administration of Taxation on Several Issues Concerning the Taxable Income of Enterprise Income Tax (Announcement of the State Administration of Taxation No. 29 of 2014)

(3) Aircrew training expenses such as pilot training fees, flight training fees, crew training fees and air guard training fees actually incurred by aviation enterprises can be deducted before tax as transportation costs of aviation enterprises in accordance with Article 27 of the Regulations on the Implementation of the the People's Republic of China Enterprise Income Tax Law.

Policy basis:Article 3 of the Announcement of the State Administration of Taxation on Several Issues Concerning Enterprise Income Tax (Announcement of the State Administration of Taxation No. 34 of 2011)

4. trade union expenditure

The trade union funds allocated by the enterprise shall not exceed 2% of the total wages and salaries, and shall be allowed to be deducted.

Policy basis:Article 41 of the Regulations on the Implementation of the the People's Republic of China Enterprise Income Tax Law (Order No. 714 of the State Council)

5. supplementary pension insurance andSupplementary medical insurance expenditure

Since January 1, 2008, in accordance with the relevant policies and regulations of the state, the supplementary old-age insurance premium and supplementary medical insurance premium paid by the enterprise for all employees working or employed in the enterprise shall be allowed to be deducted when calculating the taxable income, respectively, within the standard of not exceeding 5% of the total wages of the employees; the excess shall not be deducted.

Policy basis:Notice of the Ministry of Finance and the State Administration of Taxation on Issues concerning Enterprise Income Tax Policies for Supplementing Pension Insurance Premiums and Supplementing Medical Insurance Premiums (No.27 [2009] of the Ministry of Finance)

6. business entertainment expenses

The business entertainment expenses related to the production and operation activities of the enterprise shall be deducted according to 60% of the amount incurred, but the maximum shall not exceed 5 ‰ of the sales (business) income of the current year ‰.

Policy basis:Article 43 of the Regulations on the Implementation of the the People's Republic of China Enterprise Income Tax Law (Order No. 714 of the State Council)

7. advertising and business promotion expenses

1. General deduction ratio

The qualified advertising expenses and business promotion expenses incurred by an enterprise shall be allowed to be deducted for the part not exceeding 15% of the sales (business) income of the current year, unless otherwise stipulated by the competent departments of finance and taxation under the State Council.

Policy basis:Article 44 of the Regulations on the Implementation of the the People's Republic of China Enterprise Income Tax Law (Order No. 714 of the State Council)

2. Special industry deduction ratio

(1) The advertising expenses and business promotion expenses incurred by enterprises in the manufacture or sale of cosmetics, pharmaceutical manufacturing and beverage manufacturing (excluding alcohol manufacturing) shall not exceed 30% of the sales (business) income of the current year, and shall be allowed to be deducted.

(2) For affiliated enterprises that have signed the sharing agreement for advertising expenses and business promotion expenses (hereinafter referred to as the sharing agreement), the advertising expenses and business promotion expenses incurred by one party that do not exceed the proportion of the pre-tax deduction limit for the current year's sales (business) income can be deducted from the enterprise, or some or all of them can be collected to the other party for deduction according to the sharing agreement. The other party may exclude the advertising expenses and business promotion expenses collected to the enterprise in accordance with the above method when calculating the enterprise income tax deduction limit for the enterprise's advertising expenses and business promotion expenses.

(3) The tobacco advertising expenses and business publicity expenses of tobacco enterprises shall not be deducted in the calculation of taxable income.

Policy basis:Announcement of the General Administration of Taxation of the Ministry of Finance on Matters Relating to the Pre-tax Deduction of Advertising Expenses and Business Publicity Expenses (Announcement No. 43 of 2020 of the General Administration of Taxation of the Ministry of Finance)

8. fees and commission expenses

1. General deduction ratio

Fees and commission expenses incurred by an enterprise in connection with production and operation shall be allowed to be deducted if they do not exceed the following calculation limits; if they exceed the limits, they shall not be deducted.

Other enterprises: the limit is calculated at 5% of the amount of revenue recognized in service agreements or contracts signed with intermediary service agencies or individuals with legal business qualifications (excluding the parties to the transaction and their employees, agents and representatives, etc.).

Policy basis:Notice of the Ministry of Finance and the State Administration of Taxation on the Policy of Pre-tax Deduction of Enterprise Fees and Commission Expenses (No.29 [2009] of the Ministry of Finance)

2. The proportion of special deductions for insurance enterprises.

The fee and commission expenses incurred by an insurance enterprise in connection with its business activities shall not exceed 18% (inclusive) of the balance of the total premium income of the current year after deducting the surrender fee, etc., and shall be allowed to be deducted when calculating the taxable income.

Policy basis:Article 1 of the Announcement of the State Administration of Taxation of the Ministry of Finance on the Policy of Pre-tax Deduction of Fees and Commission Expenses of Insurance Enterprises (Announcement No. 72 of the State Administration of Taxation of the Ministry of Finance, 2019)

3. Deduction ratio of real estate development and operation enterprises

If an enterprise entrusts an overseas institution to sell and develop products, the part of the sales expenses (including commissions or handling fees) paid by the overseas institution that does not exceed 10% of the entrusted sales income shall be allowed to be deducted according to the facts.

Policy basis:Article 20 of the Notice of the State Administration of Taxation on Printing and Distributing (No. 31 [2009], State Administration of Taxation)

9. R & D expenses

1. General deduction ratio

If the R & D expenses actually incurred in the R & D activities of an enterprise are not included in the profits and losses of the current period, on the basis of actual deduction according to regulations, 75% of the actual amount will be deducted before tax during the period from January 1, 2018 to December 31, 2023. If an intangible asset is formed, it will be amortized before tax at 175 of the cost of the intangible asset during the above-mentioned period.

Policy basis:(1) Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Science and Technology on Increasing the Proportion of Pre-tax Deduction of Research and Development Expenses (No.99 [2018] of the Ministry of Finance)

（2）《财政部税务总局关于延长部分税收优惠政策执行期限的公告》（财政部税务总局公告2021年第6号）

2.制造业企业扣除比例

制造业企业开展研发活动中实际发生的研发费用，未形成无形资产计入当期损益的，在按规定据实扣除的基础上，自2021年1月1日起，再按照实际发生额的100%在税前加计扣除；形成无形资产的，自2021年1月1日起，按照无形资产成本的200%在税前摊销。

Policy basis:《财政部税务总局关于进一步完善研发费用税前加计扣除政策的公告》（财政部税务总局公告2021年第13号）

十、公益性捐赠支出

（1）企业通过公益性社会组织或者县级（含县级）以上人民政府及其组成部门和直属机构，用于慈善活动、公益事业的捐赠支出，在年度利润总额12%以内的部分，准予在计算应纳税所得额时扣除；超过年度利润总额12%的部分，准予结转以后三年内在计算应纳税所得额时扣除。

Policy basis:《财政部国家税务总局关于公益性捐赠支出企业所得税税前结转扣除有关政策的通知》（财税〔2018〕15号）

（2）企业和个人通过公益性社会组织或者县级以上人民政府及其部门等国家机关，捐赠用于应对新型冠状病毒感染的肺炎疫情的现金和物品，允许在计算应纳税所得额时全额扣除。

（3）企业和个人直接向承担疫情防治任务的医院捐赠用于应对新型冠状病毒感染的肺炎疫情的物品，允许在计算应纳税所得额时全额扣除。

Policy basis:《财政部税务总局关于支持新型冠状病毒感染的肺炎疫情防控有关捐赠税收政策的公告》（财政部税务总局公告2020年第9号）

十一、企业责任保险支出

企业参加雇主责任险、公众责任险等责任保险，按照规定缴纳的保险费，准予在企业所得税税前扣除。