Enhanced Tax Deduction

On 2 November 2018, LSCM was designated by the Commissioner for Innovation and Technology as a Designated Local Research Institution under Section 19(1) of Schedule 45 of the Inland Revenue Ordinance, Cap.112. For payments made by an enterprise to LSCM for conducting “qualifying R&D activity” on its behalf, i.e. Type B expenditure on out-sourced qualifying R&D activity, the tax deduction enjoyed by the enterprise is 300% for the first $2 million of the aggregate amount of the payments and 200% for the remaining amount by virtue of Section 13 of Schedule 45. There is no cap on the amount of enhanced tax deduction.