Recently, Sichuan Provincial Department of
Science and Technology, Sichuan Provincial Department of Finance and Sichuan
Provincial Tax Service Administration of State Taxation Administration jointly
released the Interim Measures of Sichuan Province to Put in Place the Subsidy
for Enterprises Encouraged to Increase R&D Investment. This is the first
time that Sichuan Province has released the measures of such kind.
Who will get the subsidy? As required by
the document, enterprises and cities (prefectures) will be the two types of
recipients. For enterprises, either basic research, applied research or
experimental development can be identified as corporate research and
development as long as this creative and systematic work is carried out to
increase knowledge stock and involve new applications of existing knowledge. In
addition to the basic requirements, there is also a requirement for the R&D
investment increase amount of over 10 million yuan. For cities (prefectures),
it is necessary to formulate and implement incentive policies for corporate
R&D investment, and to make fiscal investment at municipal level.
How to get the subsidy? For enterprises,
post-R&D subsidy is identified based on whether the early-stage investment
has occurred or whether it has been converted into real productivity.
Enterprises whose R&D investment continues to increase shall be given
post-R&D subsidy according to the increase amount. What are the specific
procedures? Provincial direct subsidy adopts the form of post-R&D subsidy, and
is calculated according to the increase amount of the R&D investment
declared to the tax authorities for pre-tax deduction from the income tax
payable for the last and first years of an enterprise's accounting cycle. The
subsidy amount is calculated through the method of the progressive refund in
excess of certain amounts in certain brackets, and the specific proportions
shall be made clear in the declaration notice depending on the budget of the
year.
For cities (prefectures), the R&D
investment subsidy is calculated according to a city's or a prefecture's fiscal
input in encouraging enterprises to increase R&D investment in the year
prior. The subsidy amount is calculated on specific proportions, and the
specific proportions shall be made clear in the declaration notice depending on
the budget of the year.
As stated in the document, enterprises and
cities (prefectures) subsidized shall use the provincial fiscal subsidy to
carry out scientific and technological innovation activities, and shall not use
it to pay fines, donations, sponsorship, debts and other spending, nor pay
wages and retirement costs for on-the-job personnel who enjoy government staff
status, and other expenses prohibited by state regulations.
This document will come into effect on
January 1, 2021.