The Announcement No. 40 applies to the annual final settlement from 2017 and thereafter, it centers on the collection scope of R&D expenses, and improves and specifies criteria to get information about some R&D expenses. Respective standards for the labor expenses paid to workers, expenses of direct input, depreciation expenses, and amortization of intangible assets are described in detail, and those for the design costs for new products, expenses incurred for the formulation of rules for new techniques, expenses of clinical trials conducted for new drugs at the R&D stage, and expenses of on-spot tests for exploration and development technologies are also clarified; furthermore, the standards for other relevant expenses are refined and other relevant policies are made clear as well.

The Announcement provides that requirements specified in the Announcement [2015] No.97 regarding identifying the scope of personnel directly engaged in R&D activities and accurately collecting the labor expenses of personnel who are involved in multiple types of activities remain valid, and brings new provisions on the labor dispatching and equity incentives, stating that the scope of external R&D personnel could be broadened appropriately and the equity incentives awarded to R&D personnel are eligible for the super deduction.