Policy & Regulation

State Council Unveils New Policies to Support IC Industry

Updated:2020/8/6 13:35

The State Council issued the Policies on the Promotion of High-quality Development of IC Industry and Software Industry in the New Era. To further optimize the development environment for integrated circuit industry and software industry, deepen international industrial cooperation and enhance industrial innovation capability and development quality, the State Council has outlined 37 policies and measures to be put forward in eight areas: fiscal & taxation, investment & financing, research & development, import & export, talents, intellectual property rights, market application, and international cooperation.

Integrated circuit manufacturers or projects encouraged by the State to produce integrated circuits with a line width less than 28 nanometers (included) and an operating period more than 15 years shall be exempt from enterprise income tax in the first decade.

The state-encouraged integrated circuit design, equipment, materials, packaging and testing enterprises and software enterprises shall be exempted from enterprise income tax in the first two years since they start making a profit, and shall be taxed at the statutory rate of 25% between Year 3 and Year 5 by halving the enterprise income tax.

Key integrated circuit design enterprises and software enterprises encouraged by the state are exempted from enterprise income tax in the first five years since they start making a profit, and the tax rate shall be reduced by 10% in the following years.

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