Abstract: Using a sample of Chinese A-share companies from 2009 to 2015, this paper, employing DID method, empirically examines the impact of accelerated depreciation policy of fixed assets issued by The State Council of China on corporate R&D expenditure. We find that this policy increases the corporate R&D expenditure significantly, and the impact is more pronounced in companies which apply to higher business income taxes rate or locate in provinces that have lower marketization level. Additionally, the policy affects corporate R&D expenditure through reducing a firm’ tax burden. Further analysis shows that the policy not only enhances a firm’s expenditure on physical asset using for R&D, but also promotes a firm’s investment on human resources.