Original Title: Notice from the Department of Science and Technology of Shandong Province, the Department of Finance of Shandong Province, and the Shandong Provincial Tax Bureau of the State Taxation Administration Regarding the Revision and Issuance of the "Implementation Measures for Fiscal Subsidies for Enterprise Research and Development in Shandong Province"
Article 1: To standardize and strengthen the organization and implementation of fiscal subsidies for enterprise research and development in Shandong Province, better guide enterprises to increase investment in research and development activities (hereinafter referred to as “R&D activities”), and fully stimulate the innovative vitality of enterprises, these Measures are formulated in accordance with the “Implementation Opinions of the General Office of the People’s Government of Shandong Province on Promoting the Integration of Provincial-Level Fiscal Funds for Scientific and Technological Innovation” (Lu Zheng Ban Zi [2020] No. 64),the “Notice of the People’s Government of Shandong Province on Issuing the 2022 Policy List for High-Quality Development Under the Principle of ‘Seeking Progress While Maintaining Stability’ (First Batch)” (Lu Zheng Fa [2021] No. 23), and other relevant provisions, these Measures are hereby formulated.
Article 2 For the purposes of these Measures, “R&D activities” refer to systematic activities with clear objectives that enterprises continuously carry out to acquire new scientific and technological knowledge, creatively apply such knowledge, or substantially improve technologies, products (services), or processes.The specific scope of R&D expenses actually incurred by enterprises in conducting R&D activities includes: personnel costs, costs of directly used materials, depreciation of R&D instruments and equipment, amortization of intangible assets, testing costs for new products and processes, and other related expenses. Specific implementation shall follow the relevant provisions of documents such as the “Notice of the Ministry of Finance, the State Taxation Administration, and the Ministry of Science and Technology on Improving the Policy for Additional Pre-tax Deductions of Research and Development Expenses” (Cai Shui [2015] No. 119) andthe "Notice of the Ministry of Finance, the State Taxation Administration, and the Ministry of Science and Technology on Policy Issues Concerning Additional Pre-Tax Deductions for Enterprise-Commissioned Overseas R&D Expenses" (Cai Shui [2018] No. 64), and other relevant documents.
Article 3: For the purposes of these Measures, “fiscal subsidy” refers to funds provided by the provincial government to eligible enterprises to subsidize their R&D expenditures at a specified rate, with the aim of encouraging innovation entities to continuously increase their investment in R&D. The total amount of fiscal subsidy funds is subject to control.
Article 4. Enterprises eligible for subsidies must simultaneously meet the following conditions:
(1) High-tech enterprises located within Shandong Province (excluding Qingdao) or enterprises listed in the National Database of Science and Technology-Based Small and Medium-Sized Enterprises for the current year.
(2) The enterprise’s R&D activities fall within the scope of the national policy on additional pre-tax deductions for R&D expenses, and the enterprise has filed for and is benefiting from the additional deduction policy; among these, enterprises above a certain scale must also truthfully complete the R&D activity statistical reports required by the National Bureau of Statistics.
(3) The enterprise must have conducted business operations and generated sales revenue during the current year. “Current year” refers to the fiscal year preceding the enterprise’s application; sales revenue is defined as the sum of main business revenue and other business revenue.
(4) For enterprises with annual sales revenue of 200 million yuan or more, R&D investment for the current year must increase compared to the previous year and account for 4% (inclusive) or more of the current year’s sales revenue, and the enterprise must have filed for and enjoyed the R&D expense super-deduction policy for two consecutive tax years; for enterprises with annual sales revenue of 200 million yuan or less, R&D investment for the current year must account for 6% (inclusive) or more of the current year’s sales revenue.
Article 5: Subsidy Standards:
(1) For enterprises with annual sales revenue of 200 million yuan or more that meet the criteria in Article 4, a subsidy shall be provided based on a certain percentage of the increase in R&D expenses eligible for the additional deduction compared to the previous year; for enterprises with annual sales revenue of 200 million yuan or less, a subsidy shall be provided based on a certain percentage of the total R&D expenses eligible for the additional deduction in the current year. A uniform subsidy rate shall be determined in accordance with the annual fiscal budget, with the maximum subsidy rate not exceeding 5%.
(2) Enterprises in the integrated circuit sector that meet the requirements of Article 4 shall be granted a subsidy equal to 10% of the total amount of R&D expense super-deductions they received in the current year.
(3) The maximum annual subsidy per enterprise is 5 million yuan; amounts less than 10,000 yuan are not eligible for subsidy, and the subsidy amount is rounded to the nearest 10,000 yuan.
Article 6: Subsidy Process. After the completion of the annual corporate income tax settlement and finalization, the Provincial Tax Bureau shall share the enterprises’ R&D expense super-deduction policy declaration information with the Provincial Department of Science and Technology by the end of August each year.
(1) Information Compilation and Feedback. The Provincial Department of Science and Technology shall compile the enterprises’ declarations regarding the R&D expense super-deduction policy and provide feedback on enterprises preliminarily meeting the subsidy criteria to the municipal science and technology departments.
(2) Information Supplementation and Confirmation. Municipal science and technology departments shall organize enterprises to supplement and confirm relevant information through the Shandong Science and Technology Cloud Platform. Enterprises that self-assess as meeting the subsidy criteria may submit subsidy information via the Shandong Science and Technology Cloud Platform within the specified timeframe.
(3) Review and Submission. Municipal science and technology departments, in conjunction with their counterparts in finance and taxation, shall conduct a comprehensive review of local enterprise subsidy information based on the enterprises’ R&D expense super-deduction declarations and other relevant data. They shall identify recommended recipients for subsidies, compile the results, and submit them to the Provincial Department of Science and Technology.
(4) Issuance of Subsidies. The Provincial Department of Science and Technology verifies and confirms the details of the subsidy recipients submitted by municipal-level departments, proposes a subsidy plan, and publishes it on the Provincial Department of Science and Technology website for public notice for 5 working days; after the public notice period with no objections, it issues the provincial-level enterprise R&D funding subsidy plan and copies it to the Provincial Tax Bureau. The Provincial Department of Finance arranges the subsidy funds accordingly, and the Provincial Department of Science and Technology disburses them directly to the enterprises.
Article 7: The Provincial Department of Science and Technology shall jointly manage the subsidy funds with the Provincial Department of Finance. Science and technology departments at all levels, in conjunction with finance departments, shall be responsible for supervising and managing the use of enterprise subsidy funds; tax departments, in conjunction with science and technology departments, shall be responsible for guiding and assisting enterprises in effectively utilizing the policy on additional deductions for R&D expenses.
Article 8: Subsidy funds shall be primarily used for enterprise technological innovation activities, such as the development of key common technologies for the industry, as well as new materials, new processes, and new products. Collaboration with universities and research institutions on applied basic research is encouraged. Enterprises receiving subsidies shall strengthen the management of the use of these funds and continuously increase their R&D investment.
Article 9: Science and technology, finance, and tax departments at all levels shall establish a mechanism for the exchange and reporting of management information. They shall convene coordination meetings as needed to promptly resolve issues encountered in their work.
Article 10: The Provincial Department of Science and Technology and the Provincial Department of Finance shall, at appropriate times, organize or commission third parties to conduct performance evaluations on policy implementation, fund allocation, and fund utilization, which shall serve as an important basis for subsequent policy improvements.
Article 11: If municipal science and technology, finance, and tax departments discover during routine management that an enterprise does not meet the subsidy eligibility criteria or that the subsidy amount should be reduced based on actual circumstances, they shall report such cases to the Provincial Department of Science and Technology in accordance with established procedures, and the Provincial Department of Science and Technology shall recover the funds in accordance with relevant regulations.
Article 12: Municipalities are encouraged to formulate local implementation measures for fiscal subsidies for enterprise research and development based on their own financial capabilities, thereby guiding enterprises to increase their R&D investments.
Article 13: Enterprises and relevant responsible persons found to have engaged in illegal or irregular activities, such as fraudulently obtaining or embezzling subsidy funds through fraudulent means, shall be held accountable in accordance with the "Regulations on the Penalties for Fiscal Law Violations" (State Council Order No. 427) and other relevant provisions, and the fiscal subsidies shall be recovered.
Article 14: The Provincial Department of Science and Technology, the Provincial Department of Finance, and the Provincial Tax Bureau shall be responsible for interpreting these Measures.
Article 15. These Measures shall take effect on June 11, 2022, and remain valid until December 31, 2025. Subsidies for corporate R&D investments in the 2021, 2022, 2023, and 2024 fiscal years shall be provided in accordance with these Measures.The original “Notice of the Shandong Provincial Department of Science and Technology, the Shandong Provincial Department of Finance, and the Shandong Provincial Tax Bureau of the State Taxation Administration on Issuing the <Implementation Measures for Fiscal Subsidies for Enterprise Research and Development in Shandong Province>” (Lu Ke Zi [2021] No. 2) is hereby repealed.
