Asia Express - East Asian ICT
China Offers 10-year Tax Breaks to Local Chipmakers
August 05, 2020

The State Council of the China recently announced its new incentives and preferential policies for semiconductor and software industries, the Commercial Times reported on August 5. Of many preferential policies, the most outstanding one is the one for chipmakers or projects associated with IC production using 28nm or less than 28nm processes are exempt from corporate income tax for 10 years. Only they have to have an operating period of more than 15 years to be included in such preferential tax policies. In addition, the government will provide central and local government funds to support semiconductor and software industries. The government will also financially facilitate the development of key technologies in high-end ICs, semiconductor equipment and processes, electronic design automation, and software solutions to mitigate the impact of the US ban on Chinese companies’ technological access to US technology in the long run. The State Council also pledged Chinese companies to engage in global cooperation by building overseas R&D centers and branches and exchanging proprietary resources.