A few days ago, the Shandong Provincial Sci-Tech Department, the Provincial Department of Finance and the Shandong Provincial Taxation Bureau of the State Administration of Taxation jointly issued the Measures for the Implementation of Financial Subsidy for R&D of Enterprises in Shandong Province, so as to encourage innovative entities to continue to increase investment in R&D funds. Provincial, municipal and lower levels of finance will grant subsidies to qualified enterprises in proportion to their investment in R&D funds.
For enterprises that meet the subsidy conditions, those with an annual sales income of more than RMB 200 million shall be given subsidies at 10% of the newly increased R&D expenses plus deduction expenses compared with the previous year; while those with annual sales revenue of RMB 200 million (inclusive) or less will be given subsidies according to 10% of the total amount of R&D expenses plus deduction expenses that they receive in the current year. The maximum annual subsidy for a single enterprise is RMB 10 million, in case of less than RMB 10,000, the subsidy shall be regarded as 10,000.
These Measures shall take effect on September 18, 2019, and shall be valid until September 17, 2022. The R&D investment of enterprises in 2018, 2019 and 2020 shall be subsidized in accordance with these Measures.
According to these Measures, subsidized enterprises must meet all the conditions as follows:
(I) Resident enterprises registered in Shandong province (excluding Qingdao) with sound financial accounting;
(II) The R&D activities of the enterprise fall within the scope of the national pre-tax deduction policy for R&D expenses, and the enterprise has applied for entitlement of the annual deduction policy for R&D expenses;
(III) For enterprises with an annual sales income of more than RMB 200 million, the R&D investment in the current year shall be increased over the previous year and account for more than 3% (inclusive) of the sales income thereto. For two consecutive tax years, the enterprise shall apply and enjoy the R&D expenses plus deduction policy; for those with an annual sales income of less than RMB 200 million (inclusive), the annual R&D investment shall account for more than 5% (inclusive) of the annual sales income.
It is believed that financial subsidy funds for R&D of enterprises are jointly implemented by provincial, municipal and lower levels of Finance Departments, where, the provincial financial subsidy accounts for 50%, and 60% of which is for the direct management of the provincial financial county (city) enterprise; the municipal and lower Finance Departments are in charge of the rest of the subsidy, with their respective share proportion being determined by the districts and cities on their own. For the proportion in the charge of the municipal level and below, the proportion of subsidies for enterprises in counties (cities) directly managed by the municipal level shall not be lower than the average level of city.
According to the Measures, after the completion of annual settlement of enterprise income tax, the Provincial Tax Bureau is responsible for feeding back basic information such as the declaration of enterprise R&D expenses plus deduction policies to the provincial sci-tech department, which classifies and summarizes the above information and uniformly calculates the amount of enterprise R&D subsidies before feeding back to the municipal sci-tech bureaus.
And the municipal Sci-tech Department shall organize enterprises to apply for subsidies on a voluntary basis. Upon the examination and report of the application, the Provincial Sci-tech Department along with the Provincial Tax Bureau shall check the subsidies submitted by the municipal level for confirmation, then put forward the provincial subsidy schemes, which are to be made public on the website of the Provincial Sci-tech Department for 5 working days; after publicity without objection, the provincial enterprise R&D fund subsidy program is issued, and the provincial subsidy funds is issued by the Provincial Finance Department accordingly. Within one month after receiving the provincial subsidy funds, cities shall allocate the provincial funds to the county (city, district) finance or directly to the enterprise. Meanwhile, according to the enterprise R&D fund subsidy program, municipal subsidy funds are issued, and county (city, district) finance is urged to implement subsidy funds according to the agreed subsidy ratio.
And the subsidy funds shall be used for R&D activities of enterprise. Funded enterprises shall separately account for the funds and expenditures incurred, strengthen the management of the use of subsidy funds, with constantly increased R&D investment.
The Provincial Finance Department?and the Provincial Sci-tech Department jointly manage the provincial subsidy funds. Financial departments at all levels are in charge of supervision of the use of subsidy funds, and Sci-tech Departments are in charge of that of the development of R&D activities of enterprises, and Tax Departments, together with Sci-tech Departments, are in charge of guiding and helping enterprises to make good use of the policy of calculating and deducting R&D expenses.
The Provincial Finance Department?and the Provincial Sci-tech Department shall timely organize experts or entrust a third party to evaluate performance for the implementation of the policy, the implementation of funds, the use of funds, etc., as an important basis for the subsequent improvement of the policy. (Reporter Wang Yanan)