2026 R&D Expense Super-Deduction Policy: Latest Operational Practice

The R&D expense super-deduction is a core tax incentive encouraging enterprise technological innovation. In 2026, the policy has been further optimized, allowing enterprises to enjoy the benefit at the prepayment filing stage.

1. Super-Deduction Ratio

For R&D expenses actually incurred in R&D activities that are not capitalized as intangible assets and are recorded in current profit or loss, on top of the actual deduction as prescribed, an additional 100% of the actual amount may be deducted before tax. For expenses capitalized as intangible assets, amortization before tax is allowed at 200% of the intangible asset cost. This policy is a long-term institutional arrangement.

2. Scope of R&D Expense Collection

Eligible R&D expenses include: personnel labor costs, direct input costs, depreciation, intangible asset amortization, other related expenses such as new product design fees, and outsourced R&D expenses. Total other related expenses must not exceed 10% of total R&D expenses eligible for super-deduction.

3. Auxiliary Ledger Requirements

Enterprises must maintain R&D expenditure auxiliary ledgers by project, accurately collecting and recording the actual amount of each R&D expense eligible for super-deduction in the current year. One ledger per project; shared expenses across multiple projects must be allocated using a reasonable method. At year-end, a summary of R&D expenditure auxiliary ledgers must be compiled.

4. Enjoyment at Prepayment Filing

When filing CIT prepayment for Q3 (quarterly filers) or September (monthly filers) in October, enterprises may elect to enjoy the super-deduction for R&D expenses of the first three quarters. Those who do not elect may enjoy it uniformly during the annual reconciliation.