According to Article 10 of the Enterprise Income Tax Law of People's Republic of China (PRC), when calculating taxable income, the following expenses shall not be deducted: (7) Unapproved reserve expenses.

Article 55 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC) explains this in detail: The unapproved reserve expenditure mentioned in Item (7) of Article 10 of the Enterprise Income Tax Law refers to the reserve expenditure such as asset impairment reserve and risk reserve that do not meet the requirements of the competent departments of finance and taxation of the State Council.

Extended data:

The Notice of State Taxation Administration of The People's Republic of China on Printing and Distributing the Administrative Measures for Pre-tax Deduction of Research and Development Expenses of Enterprises (for Trial Implementation) (Guo Shui Fa [2008]10/6No.) stipulates that enterprises should engage in research and development of high-tech fields supported by the state and projects specified in the Guide to Key Fields of High-tech Industrialization with Current Priority (2007) published by the National Development and Reform Commission and other departments.

(1) New product design fee, new process specification formulation fee, technical books and materials directly related to R&D activities, and materials translation fee.

(2) Expenses for materials, fuel and power directly consumed in R&D activities.

(3) Wages, salaries, bonuses, allowances and subsidies of on-the-job personnel directly engaged in R&D activities.

(4) depreciation or lease fees for instruments and equipment specially used for R&D activities.

(5) Amortization expenses of intangible assets such as software, patent right and non-patent technology specially used for R&D activities.

(6) Development and manufacturing expenses of molds and process equipment specially used for intermediate test and product trial production.

(7) Field test fee for exploration and development technology.

(eight) the expenses for demonstration, evaluation and acceptance of research and development achievements.

The tax authorities should focus on the audit: whether the collection of R&D expenses meets the requirements. The relevant materials submitted by enterprises should be strictly examined. If the requirements are not met or relevant information is not provided, the research and development expenses incurred shall not be deducted.

Baidu Encyclopedia-People's Republic of China (PRC) Enterprise Income Tax Law