Mainland expands duty-reducing platform semiconductors to benefit

The Mainland State Council announced on the (9th) day yesterday that it encourages software design and new tax cuts for the semiconductor industry. Based on the old policy “No. 18 Document”, it continues to provide corporate income tax on domestic and foreign semiconductor companies with different manufacturing processes. "Half-half" and "5-half-half-half-half-half-tax" tax breaks are a great benefit for Taiwanese semiconductor companies that set up factories in mainland China.

The mainland's State Council issued the "second-generation version" No. 18 document "Several Policies to Further Encourage the Development of the Software Industry and the Integrated Circuit Industry" on January 28 and issued it to various provinces and municipalities on the official website of the government yesterday.

The new tax reduction measures are for enterprises that meet the requirements of the manufacturing process. From the profit-making year, the enterprise income tax will be exempted for the first two years and the enterprise income tax will be halved from the third to the fifth year (two exemptions and three half reductions); Enterprises in the year are exempt from taxation in the first five years of profit, and halved in taxes from the sixth to the year (five exemptions and five halvers).

Zeng Jianqiu, a professor at Beijing University of Posts and Telecommunications who participated in the formulation of the policy, said that the new policy is to strengthen the support of mainland software and semiconductor industry, promote the development of software and semiconductor industry to a higher level, and become bigger and stronger. The software industry has also become the opening year of the "2nd Five-year Plan" of the mainland. The first industry to receive priority support from the state policy.

The First Financial Daily reported that the policy document issued by the State Council of the Mainland supports the seven aspects including taxation, investment and financing, research and development, import and export, human resources, intellectual property, and the market, and clearly stated that it will continue to implement software VAT benefits. policy.

According to industry sources, the new policies announced by the State Council yesterday were significantly different from those of the “No. 18 Document” promulgated in 2000 and are more detailed. In terms of investment and financing policies, the new policy was added to encourage “mergers and acquisitions and restructuring” to increase the international competitiveness of the mainland software industry.

In addition to tax incentives, the new policy will strengthen support for software service companies to adapt to the new trend of the software industry transition from products to services. The industry believes that this is a major breakthrough in the New Deal.

Since the mainland’s publication of “No. 18 Document”, the software industry’s revenue grew from RMB 59.3 billion (approximately NT$ 260.9 billion) to RMB 977.0 billion (approximately NT 4.39 trillion) last year. The growth rate reached 36.8%.

Zeng Jianqiu said that when the “18th article” was launched, the mainland software industry was still very weak and its competitiveness was not strong. However, under the background of economic restructuring and triple play in the mainland, the software industry has entered a new critical period and needs to be stronger. More detailed policies to support.