The Enterprise Income Tax Policies for the Digital and Intelligent Transformation of Special Equipment for Energy and Water Conservation, Environmental Protection, and Work Safety

Announcement of the Ministry of Finance and the State Taxation Administration on the Enterprise Income Tax Policies for the Digital and Intelligent Transformation of Special Equipment for Energy and Water Conservation, Environmental Protection, and Work Safety
(Announcement No. 9 [2024] of the Ministry of Finance and the State Taxation Administration)

In accordance with the requirements of the Notice by the State Council of Issuing the Action Plan for Promoting Large-scale Equipment Renewals and Consumer Goods Trade-ins (No. 7 [2024], State Council), the enterprise income tax policies for the digital and intelligent transformation of special equipment for energy and water conservation, environmental protection, and work safety (“hereinafter referred to as “special equipment”) are hereby announced as follows:
I. The investment in the digital and intelligent transformation of special equipment incurred by an enterprise during the period from January 1, 2024, to December 31, 2027, which does not exceed 50% of the original tax base when the special equipment is purchased, may be credited against the taxes payable by the enterprise in the current year at a rate of 10%. If the taxes payable by the enterprise in the current year are insufficient for the credit, the deficiency can be carried forward to subsequent years for a maximum period of five years.
II. For the purpose of this Announcement, “special equipment” means the special equipment listed in the Notice by the Ministry of Finance, the State Taxation Administration, and the Ministry of Emergency Management of Issuing the Catalogue of Special Equipment for Work Safety Eligible for Enterprise Income Tax Preferences (No. 84 [2018], MOF) and the Notice by the Ministry of Finance, the State Taxation Administration, the National Development and Reform Commission, the Ministry of Industry and Information Technology and the Ministry of Environmental Protection of Issuing the Catalogues of the Special Equipment for Energy and Water Conservation and Environmental Protection Eligible for Enterprise Income Tax Preferences (2017 Version) (No. 71 [2017], MOF), which is purchased and actually used by enterprises. The special equipment shall still meet the conditions as prescribed in the aforesaid Catalogues after the transformation, and any special equipment that fails to meet the conditions as prescribed in the aforesaid Catalogues shall not enjoy the preferences. In case of any updates to the aforesaid Catalogues, such updates shall prevail.
III. For the purpose of this Announcement, “digital and intelligent transformation......