R&D expenses deduction benefit enterprises
"In the past three years, the company's annual R&D investment has reached 8 percent, but the annual increase in the deduction ratio of R&D expenses has strengthened our determination to concentrate on research," said Zhang Zhitao, general manager of Beijing Zhuoli Hanguang Instrument.
Zhang added that starting from this year, the company's deduction for R&D expenses has increased from 75 percent to 100 percent.
To encourage technology-based SMEs to increase investment in R&D, in 2017, China took the lead in increasing the ratio of the deduction of R&D expenses for technology-based SMEs from 50 percent to 75 percent.
The tax policy support increased in 2022 and the deduction ratio of R&D expenses for technology-based SMEs has risen from 75 percent to 100 percent.
According to the policy, Beijing Autotech Electrical Equipment is expected to deduct 1.93 million yuan ($288,728) in research and development expenses in 2021, which will inject impetus into the company's new round of research and development. Currently, the company has three projects under development.
Like Autotech, there are 351 similar enterprises in Beijing E-Town that play an important role in stimulating the economy, promoting innovation, employment and taking social responsibility.