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China's Extends Immediate Deduction on Equipment


On August 8th, 2023, the Ministry of Finance and the State Tax Administration jointly issued the announcement "Announcement on the Enterprise Income Tax Policy Concerning Deductions for Equipment and Implements," which is actually the extension announcement of Cai Shui [2018] No.54.

The Announcement stated that Enterprises are allowed to include on a lump-sum basis the costs of equipment and implements that are newly bought between January 1, 2024 and December 31, 2027, into the costs and expenditures of the current period, and deduct such costs in full when the taxable income is calculated, provided that the unit value of such equipment and applicants is worth CNY5 million or below. and such costs will no longer be depreciated within certain years

However, if the unit value is above CNY 5 million, the equipment and implements shall still be subject to applicable rules set out in the Implementing Regulations of the Enterprise Income Tax Law, the Circular of the Ministry of Finance and the State Taxation Administration on Improving the Enterprise Income Tax Policies Relating to the Accelerated Depreciation of Fixed Assets (Cai Shui [2014] No. 75), the Circular of the Ministry of Finance and the State Taxation Administration on Further Improving the Enterprise Income Tax Policies Relating to the Accelerated Depreciation of Fixed Assets (Cai Shui [2015] No. 106), and other regulations.

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