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Precise measures for tax cuts and rate cuts, structural tax cuts are expected to introduce detailed rules
Our reporter / Du Lijuan / Report from Beijing
In the first year of the “XIV Five-Year Plan”, the focus of fiscal and tax reforms is still focused on reducing taxes and reducing rates. However, compared to the central government’s specific plan for tax reduction targets in 2020, the 2021 Government Work Report proposes to continue to “optimize” “and implement tax reduction policies”, and to “help a little more “to the different entities of the market.
The “China Business News” reporter learned that in various implementation policies to “help” various market entities, companies welcome the increase in the percentage of manufacturing deductions.
Zhu Mingyue, representative of the National People’s Congress and founder of Zhubajie Co., Ltd., said that to encourage business innovation, this year’s “Government Work Report” continued the policy of deducting R&D expenses and increased the proportion. an important benefit for the manufacturing industry. It is reported that in 2020, other companies in the group will enjoy a tax reduction or exemption of nearly 9 million yuan to support the development of small, medium and micro enterprises.
Promote investment in R&D
The “Government Work Report” emphasizes that this year it will continue to implement the policy of 75% business R&D expenditure plus deduction, and increase the proportion of manufacturing companies to 100%, and use tax incentives to encourage companies to increase investment in R&D.
On March 10, Peng Deng, CFO of Chongqing Wei An Detector Manufacturing Co., Ltd., told reporters that after the increase in the deduction rate for R&D expenses, an additional 4 million yuan can be deducted. costs per year. From a tax burden perspective, yes The business impact is relatively obvious.
As a domestic high-tech industry with independent intellectual property rights, the company’s investment in research and development continues to increase. Relevant data shows that in 2020, the company invested 13.88 million yuan in research and development, and enjoys a deduction of 10.41 million yuan in research and development expenses.
After the country increased the deduction policy for R&D expenses, the additional deduction rate was also increased from the original 75% to 100%. In this regard, Peng Deng calculated an account based on the company’s estimated expenditure of 16 million yuan in research and development expenses in 2021. After the increase in the ratio, it is equivalent to the cost of 4 million yuan before tax. on the income of companies. “With the support of these policies, companies will increase their investment in research and development spending in the future,” Pendeng said.
Currently, the company is developing pressure transmitters in conjunction with China General Nuclear Power Corporation. This technology has been monopolized by the United States. If it can be overcome successfully, it will realize the localization of this imported product, which is more conducive to the future development of the company, especially in the international market. More initiative.
Fan Yong, a professor at the Central University of Finance and Economics, said that by incentivizing companies to increase investment in R&D, they can generate considerable profits and free cash flow to companies, which to some extent amounts to providing financial support to companies’. Investing in R&D in new fields of technology, which is useful to improve its ability to sustain growth.
The journalist learned that the R&D expense deduction policy is primarily to encourage companies to increase investment in R&D through a preferential tax mechanism. In 2008 the “Corporation Tax Law” and its implementing regulations were promulgated, for which the preferential policy of R & D & I expenses plus deduction was officially ratified.
After that, the scope of its application was also extended from small and medium-sized technology-based companies to all companies in the industry that are eligible for the super deduction in 2018. This year’s “Government Work Report” proposed that the continuation of the aforementioned preferential measures be confirmed and that the proportion of research and development expenditures for manufacturing companies is increased to 100%.
On the impact of this policy on companies, Fan Yong said that there are currently three main categories and five preferential tax policies that encourage companies to innovate in technology. Among them, the R&D cost plus deduction policy is more inclusive and practical, and can better serve to stimulate business R&D.
Structural tax cuts
In 2020, my country will implement large-scale tax and fee reductions in stages, combined with institutional arrangements, to reduce the burden of market entities by more than 2.6 trillion yuan throughout the year, of which 1.7 trillion yuan They will be reduced and exempted. Security taxes, which will further reduce the fiscal burden of the manufacturing industry. They will become a main content of the reform.
By adjusting fiscal policy, we will increase support for the R&D activities of companies, especially advanced manufacturing companies, and we will boost my country’s manufacturing industry to move up to the upper end of the industrial chain. The “Fourteenth Five Year Plan” and the outline of long-term goals for 2035 (draft) propose that my country should strive to be at the forefront of innovative countries by 2035.
Fan Yong believes that increasing the percentage of deductions for manufacturing enterprises to 100% will play an important role in stimulating independent innovation in the manufacturing industry, promoting the transformation and upgrading of the manufacturing industry, and continuously moving from the low-end to the high-end. -End in the industrial chain.
According to data from the National Bureau of Statistics, my country’s total spending on research and social development reached 1.76 trillion yuan in 2017, representing 2.15% of gross domestic product (GDP). In 2018, after the policy of increasing the deduction rate of corporate R&D expenses to 75% was expanded from small and medium-sized technology-based companies to all companies, the R&D expenses of the entire society in my country and 2019 increased significantly. Among them, my country’s total spending on social R&D in 2019 reached 2.17 trillion yuan, representing 2.19% of GDP, which is close to the average level of the 15 EU countries. The World Intellectual Property Organization assessment shows that China’s innovation index ranks 14th in the world, and overall innovation capacity has vastly improved.
However, from a global perspective, the current total tax rate for Chinese companies is still at a relatively high level. A survey by the Chinese Academy of Tax Sciences shows that the current “tax sense” of some companies remains relatively heavy, mainly due to the imperfect tax system, narrow tax base and uneven tax distribution.
“Previously, my country has increased its tax cuts for manufacturing industries by reducing the rate of value added tax and implementing tax rebates. This year’s” Government Work Report “proposes to implement a policy of reducing taxes. structural tax. More structural tax cuts are expected in 2021. The introduction of tax policy is more obvious from a policy content perspective. ”A tax official predicted this.
The person explained that the so-called structural tax cuts are primarily aimed at specific types of taxes and are based on specific purposes to reduce the level of tax burden. According to historical experience, the effect is mainly reflected in the decrease in the real tax burden of companies.
The 2021 “Government Work Report” proposes to implement new structural tax reduction measures to cover the impact of some policy adjustments. “Based on the current downward pressure on my country’s economy, the future burden on businesses can be reduced through further structural tax reduction measures. For example, the tax rate and the adjustment of the tax base of a certain industry will reduce the actual tax burden. ” by the people mentioned above.
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