More than 629,000 companies across China have benefited from a total of 3.45 trillion yuan ($489 billion) in R&D expense tax deductions last year, said the country's top tax authority in a recent press conference.

Huang Yun, spokesperson of the State Taxation Administration, said that last year, around 405,000 high-tech companies enjoyed R&D tax deductions totaling 2.83 trillion yuan, marking a 15.1 percent year-on-year increase.

"On average, the deduction amount per high-tech enterprise was 2.5 times that of non-high-tech companies," he emphasized.

The R&D tax deduction is a preferential tax policy that allows companies to save more by way of a certain percentage of their R&D expenditure.

ALSO READ: China planning a further boost to R&D

Huang said that such a policy also effectively supported private enterprises in their innovation endeavors.

Last year, private companies benefited from a total of 2.59 trillion yuan from deductions, up 12.5 percent year-on-year. It also accounted for 75 percent of all enterprise tax deductions during the period, he said.

According to Huang Yun, the spokesperson and director of the General Office of the State Taxation Administration, data from the 2023 annual corporate income tax settlement, which concluded in the first half of this year, revealed that approximately 629,000 enterprises across China benefited from R&D expense deductions totaling 3.45 trillion yuan. This policy has injected significant momentum into accelerating the development of new productivity.

On one hand, the policy strongly supported the innovation and development of high-tech enterprises. In 2023, around 405,000 high-tech companies enjoyed R&D tax deductions amounting to 2.83 trillion yuan, marking a 15.1 percent year-on-year increase.

ALSO READ: China increased R&D investment 8.1% to over $458b

On average, the deduction amount per high-tech enterprise was 2.5 times that of non-high-tech companies. On the other hand, the policy also effectively supported private enterprises in their innovation endeavors, with private companies benefiting from deductions totaling 2.59 trillion yuan in 2023, a 12.5 percent increase year-on-year, accounting for 75 percent of all enterprise deductions.

"Moving forward, the tax authorities will fully implement the guiding principles of the 20th Central Committee's Third Plenum, further enhancing R&D expense deductions and other policies that support technological innovation, to fully support the innovative development of various enterprises and better cultivate and expand new productivity," Huang Yun emphasized.