In order to stimulate enterprises investing into new equipment and appliances, the State Administration of Taxation, together with the Ministry of Finance, and local taxation bureaus, jointly notified the enterprise income tax. With the Notice of Deduction of Equipment and Appliances Related to Corporate Income Tax – 财税 Cáishuì  n. 54), issued on May 7th, 2018, newly purchased fixed assets, including equipment and appliances but excluding buildings and houses, are deductible from corporate income tax.
According to the new notice, from January 1st, 2018 up to December 31st, 2020, fixed assets that can now be deducted as costs before tax are specified as follows:
As emerged with the Government Working Report in March 2018, China is undergoing a taxation reform. The ultimate aim is to make the taxation system flexible, incentivizing companies (especially State-Owned Enterprises) to modernize their equipment, invest in new resources, and upgrading production. This new policy can be indeed regarded as a continuation of the taxation system reform, started this year with the VAT rates’ cuts.
We warmly suggest contacting our tax experts to fully understand how to calculate fixed assets deductions from corporate income tax.