China's State Council today announced new policies offering a wide range of incentives, including tax breaks, to further optimize the environment for the development of the integrated circuit and software industries.
For integrated circuit manufacturers or projects encouraged by the State to produce integrated circuits with a line width of less than 28 nanometers (nm) and an operating period of more than 15 years, they are exempt from corporate income tax from the first to the tenth year.
For integrated circuit line widths less than 65 nanometers and operating periods of 15 years or more, integrated circuit manufacturers or projects are exempted from corporate income tax from the first to fifth year, and from the sixth to the tenth year at a statutory rate of 25 percent.
For integrated circuit manufacturers or projects whose line width is less than 130 nanometers and have been in operation for more than 10 years, they are exempted from corporate income tax from the first to the second year and 50% off at the statutory rate of 25% from the third to the fifth year.
Losses incurred in the taxable year by integrated circuit manufacturers with line widths less than 130 nanometers are allowed to be carried forward to future years, with a maximum total carry-over period of 10 years.
The state-encouraged integrated circuit design, equipment, materials, packaging and testing enterprises and software enterprises shall be exempted from corporate income tax in the first to second year from the profit-making year, and shall be taxed at the statutory rate of 25% in the third to fifth year by halving the corporate income tax.
Key integrated circuit design enterprises and software enterprises encouraged by the state are exempted from corporate income tax from the first to the fifth year from the profit-making year, and the tax rate is reduced by 10% in the following years.
In a certain period of time, integrated circuit line width less than 65 nanometers of logic circuits, memory production enterprises, as well as line width less than 0.25 microns of special process integrated circuit production enterprises to import their own production of raw materials, consumables, clean room special building materials, supporting systems and integrated circuit production equipment spare parts, exempted from import duties.
The policy states that it will further strengthen the construction of integrated circuit and software majors in colleges and universities, speed up the setting up of integrated circuit disciplines, adjust course settings, teaching plans and teaching methods in a timely manner to meet the needs of industrial development, and strive to cultivate high-level talents.
Full text here: Link (in Chinese)