China Promotes High-Quality Development of Integrated Circuits and Software Industries

The State Council has recently issued a circular on policies for promoting the high-quality development of the integrated circuit (IC) and software industries (Guo Fa No. 8 [2020]). In order to further optimise the business environment for the development of the IC and software industries, policy measures are put forward in eight areas, including fiscal and taxation as well as investment and financing. For fiscal and taxation, IC enterprises or projects with an IC linewidth of less than 28 nanometers (inclusive) encouraged by the state and have an operation period of more than 15 years are exempt from enterprise income tax from the first to the 10th year. IC enterprises or projects with an IC linewidth of less than 65 nanometers (inclusive) encouraged by the state and have an operation period of more than 15 years are exempt from enterprise income tax from the first to the fifth year, and will pay enterprise income tax at the reduced rate of half the statutory rate of 25% from the sixth to the 10th year. IC enterprises or projects with an IC linewidth of less than 130 nanometers (inclusive) encouraged by the state and have an operation period of more than 10 years are exempt from enterprise income tax in the first and second years and will pay enterprise income tax at the reduced rate of half the statutory rate of 25% from the third to fifth year.

Source: State Council ​​​​​​​