To the financial departments (bureaus), state tax bureaus, local tax bureaus, and Xinjiang Production and Construction Corps financial bureaus of provinces, autonomous regions, municipalities directly under the Central Government, and cities specifically designated in the state plan:

In accordance with the Enterprise Income Tax Law of the People's Republic of China, the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China (Order No. 512 of the State Council), the Opinions of the Central Committee of the Communist Party of China and the State Council on Deepening the Reform of the Scientific and Technological System and Accelerating the Construction of the National Innovation System, and other relevant provisions, and with the consent of the Ministry of Science and Technology, the relevant policy issues concerning the pre tax deduction of research and development expenses are hereby notified as follows:

1、 The following expenses incurred by enterprises in R&D activities can be included in the scope of R&D expenses before tax:

（1） The basic endowment insurance premiums, basic medical insurance premiums, unemployment insurance premiums, work-related injury insurance premiums, maternity insurance premiums and housing accumulation fund paid by enterprises for on-the-job personnel directly engaged in R&D activities in accordance with the scope and standards prescribed by the relevant competent department of the State Council or the provincial people's government.

（2） Expenses for operation, maintenance, adjustment, inspection and repair of instruments and equipment specially used for R&D activities.

（3） Purchase cost of samples, prototypes and general testing methods that do not constitute fixed assets.

（4） Clinical trial cost of new drug development.

（5） Appraisal cost of R&D achievements.

2、 An enterprise may employ a qualified accounting firm or tax agent firm to issue a special audit report or authentication report on the R&D expenses that can be added and deducted in the current year.

3、 If the competent tax authority disagrees with the research and development project declared by the enterprise, it may require the enterprise to provide the appraisal opinion on the research and development project issued by the science and technology department of the government at or above the municipal level.

4、 Other issues related to the policy of pre tax deduction of research and development expenses enjoyed by enterprises shall be implemented in accordance with the Notice of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Pre tax Deduction of Enterprise Research and Development Expenses (Trial) (GSF [2008] No. 116).

5、 This Notice shall be implemented as of January 1, 2013.