China Unveils Import Tax Incentives for IC and Software Industries

On 16 March, the Ministry of Finance and two other authorities issued a joint circular on import tax incentives to support the development of the integrated circuit (IC) and software industries (Cai Guan Shui No. 4 [2021]). According to this circular, logic circuit and memory chip producers that manufacture ICs with a line width of 65 nanometers or less, and producers of special process ICs with a line width of 0.25 micrometers or less, are exempt from import duties when importing raw materials of a production nature for own use (including research and development), consumables, special building materials for cleanrooms, supporting systems and spare parts of production equipment (including both imported and domestic equipment) that domestic producers cannot produce or meet performance requirements. Imports of certain new equipment are also exempt from value-added tax. The circular is effective from 27 July 2020 to 31 December 2030.

Source: Ministry of Finance