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Summary of Deduction Items and Standard for CIT in China(3)

Summary of Deduction Items and Standard for CIT in China(3)

No.


Deduction Items


Standard of Deduction/Proportion of Limit


Remark


32


Unverified provision


Non-deductable



33


Depreciation of fixed assets


Deductable within the prescribed scope


Not exceed the minimum period of depreciation


34


Depreciation of productive biological assets


Deductable within the prescribed scope


10 years for woods, 3 years for livestock


35


Amortization of intangible assets


Amortization period not less than 10 years


General intangible assets


Amortizion based on the period stipulated by the law or contract


Intangible assets obtained from investment or purchase


Non-deductable


Goodwill created by the enterprise itself


Non-deductable


Intangible assets irrelated to the business operation


36



Long term deferred expense


Deductable within the limit amount


1. The amortization for reconstruction expenses of buildings that have been fully depreciated shall be apportioned according to the estimated useful life


2.  The amortization for reconstruction expenses of leased building shall be apportioned according to the estimated useful life


3. The amortization for fixed assets repair expenses shall be apportioned according to the estimated useful life


4. For other long-term deferred expenses, the amortization period shall not be less than 3 years


37


Organization costs


Deductable


Deduct one-time in the year of commencement of  operation or amortized as long term deferred expense


38


Amortization of low value articles


Actual amount



39


Audit and notarial fees


Actual amount



40


R&D expense


Additional deduction


Additional deduction is allowed in annual CIT declaration for incurred R&D expense within the prescribed sope


41


Taxes


Deductable


CIT and VAT canít be deducted


42


Consulting and legal costs


Actual amount



43


Business trip expense


Actual amount



44


Meeting expense


Actual amount


Meeting minites and other supporting documents are required


45


Work dress expense


Actual amount



46


Transportation, installation, packing and other expenses


Actual amount



47


Printing expense


Actual amount



48


Courier and mail expense


Actual amount



49


Rental expense


Actual amount



50


Water and electricity expense


Actual amount



51


Heating/cooling costs


Calculated as welfare


Adjustment is needed when the welfare amount exceed the statutary standard


52


Fuel costs of vehicle and vessel


Actual amount



53


Allowances for employees for transportation and meal


Actual amount



54


Repair and maintenance fees


Actual amount



55


Security expense


Actual amount



56


Expenses of board of directors


Actual amount




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