rocket
Orbitax subscribers can now easily follow the latest COVID-19-related tax measures being implemented worldwide. New to Orbitax? Create a free account to access your dashboard and latest tax news.
News Share

The Tax Hub

Daily Tax Newsletter

China

Responsive image

China Introducing New Incentives for Integrated Circuit Production and Software

On 4 August 2020, China's State Council issued a Policy Notice on policies to promote the development of the integrated circuit and software sectors. For encouraged integrated circuit (IC) production enterprises and projects, the notice includes the following incentives:

  • a 10-year corporate tax exemption for IC enterprises and projects employing a process of 28 nanometers or less that have been operating for more than 15 years;
  • a 5-year corporate tax exemption followed by a 50% rate reduction for 5 years for IC enterprises and projects employing a process of 65 nanometers or less that have been operating for more than 15 years;
  • a 2-year corporate tax exemption followed by a 50% rate reduction for 3 years for IC enterprises and projects employing a process of 130 nanometers or less that have been operating for more than 10 years; and
  • an extended loss carryforward period of 10 years for IC enterprises and projects employing a process of 130 nanometers or less.

The incentives apply from the first profit making year for the IC enterprise, or the first business revenue collection year for the IC project.

In addition to the incentives for IC production enterprises and projects, incentives are also provided for encouraged enterprises involved in IC design, equipment, materials, packaging, testing, and software, including a 2-year corporate tax exemption followed by a 50% rate reduction for 3 years. For "key" encouraged IC design and software enterprises, a 5-year exemption is provided, followed by a reduced rate of 10% for subsequent years.

IC enterprises and software enterprises will also continue to enjoy preferential VAT policies, which includes zero-rating for IC design and testing services and software services. Lastly, import duty exemptions are provided on raw materials, consumables, and parts by qualifying enterprises manufacturing memory with integrated circuits employing a process of 65 nanometers or less.

The policy notice provides that it will be implemented from its date of issuance. Further details on the implementation of the policies are expected from the Ministry of Finance and the State Administration of Taxation and will be published once available.

Powerful Tax Tools

NEW

FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.

NEW

Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.

NEW

Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.

NEW

Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.

NEW

Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.

NEW

OECD BEPS Project

Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.

NEW

Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.

NEW

Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

NEW

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

NEW

Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.

NEW

Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.

NEW

Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.

NEW

VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.

NEW

NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.

NEW

Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.

NEW

Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Compare Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More