The Chinese government has created preferential tax policies for software and integrated circuit (IC) enterprises to spur technological innovation and industrial upgrading, according to a government statement issued on Thursday.
Backdated to Jan. 1, 2011 and effective until Dec. 31, 2017, enterprises that manufacture IC lines thinner than 0.8 microns will be approved for two-year corporate tax exemptions once they make a profit. They will then be taxed only half of their corporate income for another three years, said a joint statement from the Ministry of Finance and the State Administration of Taxation.
China's current corporate income tax rate is set at 25%.
Those companies producing IC lines thinner than 0.25 microns or with investment exceeding 8 billion yuan (1.27 billion U.S. dollars) will be taxed corporate income according to a discounted rate at 15%.
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