China Has Formulated a Package of Policies to Promote the High-quality Development of Integrated Circuits and Software Industries

The State Council has issued "Several Policies for promoting the High-Quality Development of the Integrated Circuit Industry and Software Industry in the New Era" (hereinafter referred to as "Several Policies"), and formulated policy measures in fiscal and taxation, investment and financing, research and development, import and export, talent, intellectual property rights, market applications and international cooperation, with the aim of further optimizing the development environment of the integrated circuit industry and software industry, deepening international cooperation in industry, and enhancing industrial innovation capacity and quality of development. In terms of fiscal and tax support, the "Several Measures" stipulate that the state shall adjust the conditions and scope of preferential income tax policies and scope of the integrated circuit enterprises or projects and software enterprises, and make dynamic adjustments according to the situation of industrial and technological progress. Specifically: For the state-encouraged integrated circuit line width of less than 28 nanometers (inclusive), and operating period of more than 15 years of integrated circuit production enterprises or projects, the first year to the first year exempt from corporate income tax. Integrated circuit design, equipment, materials, packaging, testing enterprises and software enterprises encouraged by the State shall be exempted from corporate income tax for the first year to the second year from the profit-making year, and shall be subject to enterprise income tax in half from the statutory tax rate of 25% in the third to the fifth year. Key integrated circuit design enterprises and software enterprises encouraged by the State shall be exempted from corporate income tax for the first year to the fifth year from the profit-making year, and corporate income tax shall be levied at a rate of 10% for the following year.