Four ministries and commissions issued enterprise income tax policies to promote the high-quality development of integrated circuit industry and software industry.

 

In accordance with the relevant requirements of the Circular of the State Council on issuing and issuing policies on promoting the High-quality Development of the Integrated Circuit Industry and Software Industry in the New period (Guofa (2020) No. 8), in order to promote the high-quality development of the integrated circuit industry and software industry, the relevant enterprise income tax policy issues are hereby announced as follows:

 

I. Integrated circuit manufacturing enterprises or projects encouraged by the state with a linewidth of less than 28 nm (inclusive) and operating for more than 15 years shall be exempted from enterprise income tax from the first to the tenth year. Integrated circuit manufacturing enterprises or projects encouraged by the state with a linewidth of less than 65 nm (inclusive) and operating for more than 15 years shall be exempted from enterprise income tax from the first to the fifth year, and the enterprise income tax shall be halved at the statutory rate of 25% from the sixth to the tenth year. Integrated circuit manufacturing enterprises or projects encouraged by the state with a linewidth of less than 130 nm (inclusive) and operating for more than 10 years shall be exempted from enterprise income tax from the first year to the second year, and the enterprise income tax shall be halved at the statutory rate of 25% from the third to the fifth year.

 

For those that enjoy preferential tax policies in accordance with integrated circuit production enterprises, the preferential period shall be calculated from the profit-making year; for integrated circuit production projects that enjoy preferential tax policies, the preferential period shall be calculated from the tax year in which the first production and operation income is obtained by the project, and the integrated circuit production project shall carry out separate accounting, calculate the income and reasonably apportion the expenses during the period.

 

The list of integrated circuit manufacturing enterprises or projects encouraged by the state shall be formulated by the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the State Administration of Taxation and other relevant departments.

 

2. If the integrated circuit manufacturing enterprises encouraged by the state have a linewidth of less than 130 nm (including), the outstanding losses incurred in the five tax years preceding the list of integrated circuit manufacturing enterprises encouraged by the state shall be allowed to be carried forward to subsequent years, the maximum transfer period shall not exceed 10 years.

 

3. Integrated circuit design, equipment, materials, packaging and testing enterprises and software enterprises encouraged by the state shall be exempted from enterprise income tax from the first to the second year starting from the profit-making year, and the enterprise income tax shall be halved at the statutory rate of 25% from the third to the fifth year.

 

The conditions for integrated circuit design, equipment, materials, packaging and testing enterprises and software enterprises encouraged by the state shall be formulated by the Ministry of Industry and Information Technology in conjunction with the National Development and Reform Commission, the Ministry of Finance, the State Administration of Taxation and other relevant departments.

 

IV. Key integrated circuit design enterprises and software enterprises encouraged by the state shall, starting from the profit-making year, be exempted from enterprise income tax from the first to the fifth year, and shall be levied at a reduced rate of 10% in subsequent years.

 

The list of key integrated circuit design and software enterprises encouraged by the state shall be formulated by the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the State Administration of Taxation and other relevant departments.

 

5. Enterprises or projects that meet the conditions of the original policy and have entered the preferential period before 2019 (inclusive) may continue to enjoy them in accordance with the provisions of the original policy from 2020 onwards until the expiration of the period. If they also meet the provisions of articles 1 to 4 of this announcement, they may enjoy the relevant concessions in accordance with the provisions of this announcement, in which regular tax reduction and exemption concessions may be calculated in accordance with the provisions of this announcement, and enjoy the preferential period for the remaining period until the expiration of the period. In line with the original policy conditions, enterprises or projects that have not entered the preferential period before 2019 (inclusive) will no longer implement the original policy from 2020 (inclusive).

 

6. If an integrated circuit enterprise or project or software enterprise conforms to a number of preferential policies for regular tax reduction or exemption at the same time in accordance with the provisions of this announcement, the enterprise shall choose one of them to enjoy the relevant preferential policies. Among them, if it has entered the preferential period, the enterprise can choose one of the policies to enjoy the relevant preferential treatment in the remaining period.

 

7. If the preferential treatment stipulated in this announcement is managed by the list, the National Development and Reform Commission and the Ministry of Industry and Information Technology shall, before the end of March of each year, provide the Ministry of Finance and the State Administration of Taxation with a list of enterprises and projects that can enjoy preferential treatment in the previous year. If the preferential treatment is not managed by the list, the tax authorities shall, in accordance with the provisions of Article 10 of Finance and Taxation (2016) No. 49, refer it to the development and reform, industry and information department for verification.

 

8. If an integrated circuit enterprise or project or software enterprise enjoys preferential treatment in accordance with the provisions of the original policy, the tax authorities shall, in accordance with the provisions of Article 10 of Finance and Taxation (2016) 49, transfer it to the development and reform, industry and information department for verification.

 

IX. The original policy mentioned in this announcement Including: circular of the State Administration of Taxation of the Ministry of Finance on further encouraging the development of enterprise income tax policies in software industry and integrated circuit industry (Finance and Taxation (2012) No. 27), notice of the Ministry of Finance, State Administration of Taxation Development and Reform Commission and the Ministry of Industry and Information Technology on further encouraging the development of integrated circuit industry enterprise income tax policy (Finance and tax (2015) No. 6), Circular of the Ministry of Finance, the State Administration of Taxation, the Ministry of Industry and Information Technology on issues related to preferential policies for Enterprise income tax in Software and Integrated Circuit Industry (Finance and Taxation (2016) No. 49), notice of the Ministry of Industry and Information Technology of the State Development and Reform Commission of the Ministry of Finance and Taxation on issues related to Enterprise income tax policies for Integrated Circuit Manufacturing Enterprises (Finance and Taxation (2018) No. 27), Announcement of the State Administration of Taxation of the Ministry of Finance on enterprise income tax policy for integrated circuit design and software industry (announcement No. 68 of 2019 of the State Administration of Taxation of the Ministry of Finance), announcement of the State Administration of Taxation of the Ministry of Finance on the applicable policies for the settlement and settlement of enterprise income tax for integrated circuit design enterprises and software enterprises in 2019 (announcement No. 29 of the State Administration of Taxation of the Ministry of Finance).

 

10. This announcement shall enter into force as of January 1, 2020. If the key software enterprises and integrated circuit design enterprises within the national planning and layout do not enjoy the tax exemption in the current year, the provisions of Article 2 of Finance and Taxation (2012) 27 that "Enterprise income tax shall be levied at a reduced tax rate of 15%" and Article 4 "key software enterprises and integrated circuit design enterprises within the national planning and layout shall be suspended at the same time.

 

Ministry of Finance

State Administration of Taxation

National Development and Reform Commission

Ministry of Industry and Information Technology

December 11, 2020