Based on "Provisional Regulations of income tax credit on Chinese-made machineries/facilities investment under technological transformation" (Cai Shui Zi. [1999] 290) and "The examination and verification management measures of income tax credit on Chinese-made machineries/facilities under technological transformation" (Guo Shui Fa [2000] 013) announced by the State Administrative of Taxation, the Zhejiang Local taxation bureau clarified the calculation method of the income tax credit/set-off on the facilities acquisition under the technological transformation project.

1. In the event that the machineries/facilities under the technological transformation project are purchased in different period, the enterprises are allowed to claim the costs of more than two different piece of machineries/facilities as tax credit during the same year of assessment under the "first in, first set-off" basis.

2. The credit/set-off can only use to off set the amount of the increased portion of the income tax ("the Additional Enterprise Income Tax") derived by the enterprise during the respective assessment. The Additional Enterprise Income Tax is calculated by reference to the following method "the enterprise income tax payable for the current year assessment minus enterprise income tax paid for the previous year assessment". If the balance of Additional Income Tax after deduction of the credit for the "first" machineries/facilities is not sufficient to off set the whole amount of credit for the "first" machineries/facilities and the cost of "second" machineries/facilities, the credit could use to off set the whole amount of Additional Enterprise Income Tax payable for the current year. The remaining portion of the credit available on the "first" and the full credit available on the "second" machineries could be brought forward to next year of assessment. In case that the amount of enterprise income tax paid for previous year is greater than the amount of enterprise income tax payable for the current year. There will be no Additional Enterprise Income Tax. Hence, all the credit available would be brought forward to next year. The enterprise will have to pay the actual amount of enterprise income tax accordingly.

浙江省地方稅務局根據國家稅務總局《技術改造國產設備投資抵免企業所得稅暫行辦法》（財稅字[1999]290號）和《技術改造國產設備投資抵免企業所得稅審核管理辦法》（國稅發[2000]013號）的有關規定，對技術改造專案分年度購置設備抵免企業所得稅的計算明確如下：

一、當技術改造專案分年度購置設備或機器時，企業可利用該兩個或兩個以上年度的設備或機器投資額，以「先購置先抵免」的原則與單一年度的企業所得稅進行抵免。

二、有關投資額只適用於抵免該企業在各自年度的「企業所得稅新增額」。「企業所得稅新增額」的計算方法為，「當年度的應付企業所得稅額減去前一年度巳付的企業所得稅額」。在計算「企業所得稅新增額」後，該企業便可利用該年度的設備或機器投資額，以「先購置先抵免」的原則，與「企業所得稅新增額」進行抵免。如果該年度的設備或機器投資額與該年度的「企業所得稅新增額」 抵免後還有餘額，則該筆餘額按規定可結轉往下期，以抵免往後年度的「企業所得稅新增額」。如果企業當年度的應付企業所得稅額少過或等於前一年度巳付的企業所得稅額，即該企業當年度沒有「企業所得稅新增額」，那麼該年度的設備或機器投資額及前期餘額可累積結轉往下期以抵免往後年度的「企業所得稅新增額」，而該企業則須繳付全數的企業所得稅。