On September 29, 2013, he Ministry of Finance released a notice (having retroactive effect starting from January 1, 2013), on additional pre-tax deduction of R&D expenses. According to the Notice, expenses to be included in the R&D fees eligible for additional pre-tax deduction shall include social insurance and house funds that the enterprises paid for staff directly engaging in R&D activities, expenses for instrument, equipment operation and maintenance, adjustment, inspection, overhaul and other costs devoted to R&D activities, purchase expenses for samples, prototypes which do not constitute fixed assets as well as for the general testing methods, clinical trial fees for drug development and appraisal fees for R&D results. Such notice is in line with the general PRC policy that aims encourage the relocation to China of R&D departments or the establishment of R&D companies, by creating a more favorable business environment.

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