Abstract:    Tax incentives have a significant impact on the research and development (R&D) innovation activities of listed companies in China. In order to explore the possible issues and reasons for R&D expenses of listed companies under the new tax incentive policies, Company X was taken as an example and its R&D input and output data were compared vertically and horizontally. This study found that under the new tax incentives, there is no direct correlation between corporate innovation output and R&D investment. A detailed analysis of the R&D expenses revealed that there is a possibility for companies to adjust other costs or expenses to R&D expenses, which was achieved through structural adjustments in R&D personnel. Further discussion found that the reasons for companies to adjust the classification of R&D expenses are due to excessive performance pressure, insufficient market competitiveness, risks of being treated by ST, favorable tax incentives, and insufficient regulatory efforts. The paper had made an in-depth exploration of the classification adjustment of enterprise R&D expenses from a case perspective, which will not only enrich the literature research on R&D expense classification issues, but also provide corresponding suggestions and references for optimizing R&D expense accounting recognition and strengthening tax incentive supervision.

Key words: tax incentive, R&D manipulation, R&D expense, R&D innovation, innovation performance