Research On Problems And Advices Of Enterprise R&D Expenditure Plus Deduction Policy

As the major of innovation, enterprises promote the innovation through the development of new technology, new products. In order to encourage the development of innovation and entrepreneurship, countries launched a series of value-added tax, income tax and other tax preferential policies. Among them, R&D expenses plus deduction policy is one of the most important, which can promote the depth of integration of science and technology and economy, provide support to innovation and entrepreneurship.In 1996 China has issued a notice on promoting the technological progress of enterprises related financial and tax issues, the state-owned and collective enterprises R & D expenses are deductible. In 2006 the government officially allowed enterprises R&D expenses enjoying 150% tax deduction plus.This paper selects Dongguan City as a typical case and try to analyze the application of R&D expense plus deduction policy of different dimensions, identifying and summarizing the existing problems of enterprises' R&D activities as well as understanding the difficulties faced by the tax authorities in the implementation of policy.And then providing a factual basis and experience reference for the reform of deduction policy in Guangdong Province and China.With the analysis of the implementation of the R&D expense plus deduction policy in Dongguan City, it is found that there are the following problems. In the aspect of policy design, firstly the differences between accounting treatment and tax law are large and the tax adjustment is complicated. Secondly R&D expenses are complicated and some of the costs are not clear; thirdly enterprise project management is not standardized,leading to difficulty in material collection; fourthly the power of tax authorities is too large, easily causing law enforcement risk. In the implementation of the policy, the enterprise awareness of preferential policies is not high; some enterprises take the initiative to give up the enjoyment of tax incentives; high application costs, business enthusiasm is not strong; functional departments convergence is poor, propaganda counseling is not enough; the implementation of different scales in different place may result in the contradiction.Further summarizing the strong mitigation of enterprises and tax authorities in the actual operation of Dongguan City, and analyzing the reasons for the three aspects including policy design, policy implementation and enterprise. The reasons about the policy design are the details of the R&D expenses are not entirely clear; some of the regulations are unreasonable. The reasons for the implementation of the policy include that tax department review process is still cumbersome; R&D project process and legal control mechanism is not perfect; coordination between departments is not smooth.Enterprise reasons includes that enterprises do not attach importance to scientific and technological innovation and tax incentives to declare; enterprises have difficulty to accurately divide the accounting and tax treatment differences; preferential margins are not attractive to the enterprise is not strong.Through the concrete analysis of Dongguan City, this paper puts forward some policy suggestions according to the problems existing in policy practice. For the government departments, we suggest that government should improve the policy design,reduce the policy threshold; increase the intensity of corporate R&D activities, and the tilt of small and medium enterprises; to further relax the deduction policy and the scope of application; simplify the application process; restraint of the power of the tax authorities; to strengthen the policy advocacy of targeted. For enterprises, we suggest that financial accounting should be improved; establish a correct sense of development.