ANNOUNCEMENT 16 Mar 2021

 In March 2021, the Chinese government announced a selective import tariff reduction policy.

NUMBER OF INTERVENTIONS

2

  • 1 harmful
  • 0 neutral
  • 1 liberalising

SOURCE

PRC Ministry of Finance, March 16th, 2021. (财关税〔2021〕4号 财政部 海关总署 税务总局关于支持集成电路产业和软件产业发展进口税收政策的通知)
http://gss.mof.gov.cn/gzdt/zhengcefabu/202103/t20210329_3677452.htm

Ibid., March 22nd, 2021. (财关税〔2021〕5号 财政部 国家发展改革委 工业和信息化部 海关总署 税务总局关于支持集成电路产业和软件产业发展进口税收政策管理办法的通知)
http://www.gov.cn/zhengce/zhengceku/2021-03/29/content_5596565.htm

Inception date: 27 Jul 2020 | Removal date: 31 Dec 2030

Import tariff

On 16 March 2021, the Chinese government released Caiguanshui 2021/4 (hereafter, 'Announcement'), which expanded preferential treatment of firms in the integrated circuit (IC) manufacturing industry by allowing tariff-free imports for certain firms. The exemptions granted apply to imports of raw materials and equipment required by the eligible firms. The announcement does not provide specific products that are exempt.

The specific eligibility criteria were announced on a later announcement, Caiguanshui 2021/5. According to this document, the types of firms that are eligible for the tariff exemptions are expanded and summarised below:

  • Manufacturers of logic boards and memory using ICs of gauge ≤65nm;
  • Manufacturers of other 'specialised products' using ICs of gauge ≤25μm (examples given are: analog/digital-analog hybrid, high voltage devices, radiofrequency devices, power devices, optoelectronic integration, image sensors, micro-electromechanical systems, silicon-on-insulator processes);
  • Compound integrated circuit manufacturers and advanced packaging and testing companies using ICs of gauge ≤0.5μm;
  • Production of key raw materials and parts for the IC industry;
  • Manufacturers of photoresistors, reticles, 8-inch diameter or greater silicon wafers/boules for integrated circuits.

While precise HS codes are not provided, the Announcement states in each case listed above that goods which are unavailable in China (or available but of sub-sufficient quality) and are necessary for the process in question are eligible for the duty-free imports.

The announcement reiterates that the restrictions pertaining to other preferential measures, such as the 'Major Technical Equiment' catalogues will apply equally for IC manufacturers, specifically the lists of products for which preferential tax rates are not applicable. Please refer to the related act for an example of one such edition of this policy.

The announcement stated that the policy will remain in effect until the end of 2030, and retroactively applied to imports starting 27 July 2020.

For other preferential policies relating to ICs are still in effect, see related state acts. 

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A
Inception date: 27 Jul 2020 | Removal date: 31 Dec 2030

Tax or social insurance relief

On 16 March 2021, the Chinese Ministry of Finance released Caiguanshui 2021/4, which implemented import tariff exemptions for firms in the integrated circuit (IC) industry. As the duty concessions on raw materials only apply to the IC industry, this grants a selective tax concession. 

For information pertaining to the import tariff exemptions, please refer to the other intervention.

The policy was implemented retroactively from 27 July 2020, to last until the end of 2030.