Tax Cuts for Chip­mak­ers

Beijing Review - - This Week Economy -

Chip pro­duc­ers will en­joy tax ex­emp­tions and re­duc­tions as part of the gov­ern­ment’s ef­fort to stim­u­late the man­u­fac­tur­ing of high­per­for­mance in­te­grated cir­cuits (ICs), ac­cord­ing to a state­ment from the Min­istry of Fi­nance on March 30.

Busi­nesses es­tab­lished af­ter Jan­uary 1 to man­u­fac­ture ICs with lines thin­ner than 130 nanome­ters (nm) will be ex­empt from pay­ing in­come tax for the first two years, the doc­u­ment said.

The tax rate will be 12.5 per­cent be­gin­ning in the third year, half of the cur­rent statu­tory level.

The ex­emp­tion pe­riod will last five years if the IC lines are thin­ner than 65 nm or the in­vest­ment to­taled more than 15 bil­lion yuan ($2.39 bil­lion).

Busi­nesses es­tab­lished be­fore 2018 pro­duc­ing 0.25- and 0.8-mi­cron chips can also en­joy sim­i­lar fa­vor­able poli­cies af­ter they post prof­its, the state­ment added.

The IC sec­tor has been dubbed an emerg­ing sec­tor of strate­gic im­por­tance in China. It main­tained a 20-per­cent an­nual growth rate through­out the past five years.

Miao Wei, Min­is­ter of In­dus­try and In­for­ma­tion Tech­nol­ogy, said

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