Tax Cuts for Chipmakers
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