IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 27 Jul 2020 | Removal date: open ended

Tax or social insurance relief

On July 27th, 2020, the Chinese State Council released Guofa 2020/8 (hereafter, 'New Policy') - a new edition in a decennial series of policies released by the Chinese government to support the software and integrated circuit (IC) industries through various targeted support instruments. The previous edition, Guofa 2011/4 (hereafter, 'Old Policy') is linked in the 'related acts' section, with full details.

The New Policy explicitly continued the existing support measures, as well as expanding their scope and degree of support. The changes are summarised below.

  • Qualified IC manufacturers manufacturing circuits with gauge of ≤28nm who have been operating for 15 or more years exempt from corporate income tax (CIT) payments for up to ten years. Previously, the exemption had only been applicable for five years.
  • Those with a circuit line gauge of ≤65nm and operating for 15 or more years exempt from CIT for five years, then half rate tax deduction of a halved CIT tax (halved rate is 25%, so half of that again is 12.5%) for the following five years.
  • For firms manufacturing ICs with a circuit gauge of ≤130nm who have been operating for ten or more years, exemption from CIT for two years, then the half-rate half deduction (as above) for three years after this.

The New Policy reiterated the other support measures applicable to the industry, which included import duty exemptions, various accounting leniencies, and other procedural support measures. These are broadly the same as in the Old Policy.

The New Policy was stated to go into effect upon its promulgation. The support instruments contained within top-level policies such as this one are often revealed in more concrete detail when the specific industries tasked with implementing the policies release more focused announcements. In this case, the GTA considers this New Policy implemented unless evidence to the contrary emerges.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

449 Other special-purpose machinery & parts
8486 Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays; machines and apparatus specified in Note 9 (C) to this Chapter
848610 Machines and apparatus for the manufacture of boules or wafers
848620 Machines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits
848630 Machines and apparatus for the manufacture of flat panel displays
848640 Machines and apparatus specified in Note 9 (C) to this Chapter
848690 Parts and accessories

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