2026 R&D Super-Deduction Expansion for Foreign Enterprises
Published: April 1, 2026
Executive Summary
China expanded its R&D super-deduction policy effective April 2026, increasing the deduction rate to 120% for general R&D and 200% for strategic technology R&D (AI, semiconductors, biotech). For the first time, foreign-invested R&D centers are explicitly eligible on equal terms with domestic enterprises.
Key Points
General R&D: 120% super-deduction on qualifying expenses (up from 100%)
Strategic tech R&D: 200% super-deduction for AI, semiconductors, biotech, quantum computing
Foreign R&D centers: explicitly eligible on equal terms — previous ambiguity resolved
Qualifying expenses broadened: includes overseas researcher salaries, cloud computing costs for R&D
Cash refund option: if deductions exceed tax liability, excess refundable in cash (previously only carry-forward)
Simplified documentation: pre-approval replaced with self-declaration + post-audit for most enterprises