Beneficial for the domestic integrated circuit and software industry! Lotus Electronics has learned that in order to promote the high-quality development of China's integrated circuit and software industries, boost and encourage global cooperation in the domestic chip and software industries, the State Council recently issued "Several Policies" proposing policy support for eight aspects, including financial and tax reduction, investment and financing, research and development, and exempting eligible enterprises or projects from up to 10 years of income tax
Lotus Electronics has learned that in order to promote the high-quality development of China's integrated circuit and software industries, the State Council recently issued several policies to promote the high-quality development of the integrated circuit and software industries in the new era.

Specifically reflected in what aspects? The "Several Policies" propose to further optimize the development environment of the integrated circuit industry and software industry, deepen international cooperation in the industry, enhance industrial innovation capabilities and development quality, and formulate eight policy measures in finance and taxation, investment and financing, research and development, import and export, talent, intellectual property, market application, and international cooperation. Further innovate institutional mechanisms, encourage the development of the integrated circuit and software industries, and vigorously cultivate enterprises in the integrated circuit and software fields. Strengthen the construction of integrated circuits and software majors, accelerate the establishment of primary disciplines for integrated circuits, and support the integration of industry and education. Strictly implement the intellectual property protection system and increase the punishment for intellectual property infringement and illegal behavior in integrated circuits and software. Promote the development of industrial clusters, standardize the order of industrial markets, and actively engage in international cooperation.
Are there any restrictions on the nature of the enterprise? The Several Policies specify that all integrated circuit and software enterprises established within China, regardless of their ownership nature, can enjoy relevant policies in accordance with regulations. They also encourage and advocate global cooperation between the integrated circuit and software industries, and actively create a market-oriented, legal, and international business environment for various market entities to invest and develop in China.
Lotus Electronics has learned that the main contents of the "Several Policies" regarding corporate income tax reduction and exemption include:
1. Integrated circuit production enterprises or projects encouraged by the state with a line width less than 28 nanometers (inclusive) and an operating period of more than 15 years are exempt from corporate income tax from the first to the tenth year.
2. Enterprises engaged in integrated circuit design, equipment, materials, packaging, testing, and software encouraged by the state shall be exempt from corporate income tax from the first to second years starting from the profitable year, and shall be subject to corporate income tax at a statutory tax rate of 25% reduced by half from the third to fifth years.
3. Key integrated circuit design enterprises and software enterprises encouraged by the state are exempt from corporate income tax from the first year to the fifth year starting from the profitable year, and will be subject to corporate income tax at a reduced rate of 10% for subsequent years.
Attachment: Full text of "Several Policies to Promote High Quality Development of Integrated Circuit Industry and Software Industry in the New Era"
Several Policies to Promote High Quality Development of Integrated Circuit Industry and Software Industry in the New Era
The integrated circuit industry and software industry are the core of the information industry and the key forces leading a new round of technological revolution and industrial transformation. Since the issuance of the "Notice of the State Council on Printing and Distributing Several Policies to Encourage the Development of the Software Industry and Integrated Circuit Industry" (Guofa [2000] No. 18) and the "Notice of the State Council on Printing and Distributing Several Policies to Further Encourage the Development of the Software Industry and Integrated Circuit Industry" (Guofa [2011] No. 4), China's integrated circuit industry and software industry have developed rapidly, providing strong support for national informatization construction and promoting sustained and healthy development of the national economy and society. To further optimize the development environment of the integrated circuit industry and software industry, deepen international cooperation in the industry, enhance industrial innovation capabilities and development quality, the following policies are formulated.
1、 Financial and tax policies
（1） Integrated circuit production enterprises or projects encouraged by the state with a line width less than 28 nanometers (inclusive) and an operating period of more than 15 years are exempt from corporate income tax from the first to tenth year. Integrated circuit production enterprises or projects encouraged by the state with a line width of less than 65 nanometers (inclusive) and an operating period of more than 15 years are exempt from corporate income tax from the first to fifth years, and are subject to corporate income tax at a statutory tax rate of 25% reduced by half from the sixth to tenth years. Integrated circuit production enterprises or projects encouraged by the state with a line width less than 130 nanometers (inclusive) and an operating period of more than 10 years are exempt from corporate income tax from the first to second years, and are subject to corporate income tax at a statutory tax rate of 25% reduced by half from the third to fifth years. The losses incurred by integrated circuit production enterprises with a line width less than 130 nanometers (inclusive) encouraged by the state during the tax year are allowed to be carried forward to future years, and the maximum period for summarizing and transferring shall not exceed 10 years.
For integrated circuit production enterprises that enjoy tax preferential policies, the preferential period shall be calculated from the year of profit; For integrated circuit production projects that enjoy tax preferential policies, the preferential period shall be calculated from the tax year in which the first production and operation income of the project is obtained. The list of integrated circuit production enterprises or projects encouraged by the state shall be formulated by the National Development and Reform Commission, the Ministry of Industry and Information Technology in conjunction with relevant departments.
（2） Integrated circuit design, equipment, materials, packaging, testing enterprises, and software enterprises encouraged by the state are exempt from corporate income tax from the first to second year of profit, and are subject to corporate income tax at a statutory tax rate of 25% reduced by half from the third to fifth year. The conditions for integrated circuit design, equipment, materials, packaging, and testing enterprises encouraged by the state shall be formulated by the Ministry of Industry and Information Technology in conjunction with relevant departments.
（3） Key integrated circuit design enterprises and software enterprises encouraged by the state are exempt from corporate income tax from the first year to the fifth year starting from the profitable year, and are subject to corporate income tax at a reduced rate of 10% for subsequent years. The list of key integrated circuit design enterprises and software enterprises encouraged by the state shall be formulated by the National Development and Reform Commission, the Ministry of Industry and Information Technology in conjunction with relevant departments.
（4） The conditions and scope of income tax preferential policies implemented by the state for integrated circuit enterprises, projects, and software enterprises shall be dynamically adjusted according to the progress of industrial technology. The enterprise income tax of integrated circuit design enterprises and software enterprises in the years prior to the implementation of this policy shall be implemented in accordance with the preferential policy of "two exemptions and three reductions in half" for enterprise income tax as specified in the State Council Document [2011] No. 4.
（5） Continue to implement value-added tax preferential policies for integrated circuit enterprises and software enterprises.
（6） During a certain period of time, logic circuit and memory production enterprises with integrated circuit line width less than 65 nanometers (inclusive), as well as characteristic process integrated circuit production enterprises with line width less than 0.25 micrometers (inclusive) (including mask and 8-inch and above silicon wafer production enterprises), import self used production raw materials, consumables, special building materials for purification rooms, supporting systems, and integrated circuit production equipment spare parts, are exempt from import tariffs; Compound integrated circuit production enterprises and advanced packaging and testing enterprises with integrated circuit line width less than 0.5 microns (inclusive) are exempt from import tariffs when importing production raw materials and consumables for their own use. The specific policies shall be formulated by the Ministry of Finance in conjunction with relevant departments such as the General Administration of Customs. The list of enterprises and the list of tax-free goods shall be formulated by the National Development and Reform Commission, the Ministry of Industry and Information Technology in conjunction with relevant departments.
（7） During a certain period of time, key integrated circuit design enterprises and software enterprises encouraged by the state, as well as integrated circuit production enterprises and advanced packaging and testing enterprises mentioned in Article (6), shall import equipment for their own use, as well as technology (including software), accessories, and spare parts imported along with the equipment according to the contract. Except for the goods listed in the relevant non duty-free import commodity catalog, import tariffs shall be exempted. The specific policies shall be formulated by the Ministry of Finance in conjunction with relevant departments such as the General Administration of Customs.
（8） During a certain period of time, new equipment imported for major integrated circuit projects is allowed to pay import value-added tax in installments. The specific policies shall be formulated by the Ministry of Finance in conjunction with relevant departments such as the General Administration of Customs.
2、 Investment and financing policies
（9） Strengthen services and guidance for the construction of major integrated circuit projects, orderly guide and standardize the development order of the integrated circuit industry, do a good job in planning and layout, strengthen risk warning, and avoid low-level redundant construction.
（10） Encourage and support integrated circuit and software enterprises to strengthen resource integration, and actively support and guide the restructuring and mergers and acquisitions of enterprises in accordance with market-oriented principles. Relevant departments of the State Council and local governments shall not set any form of restrictive conditions other than laws, regulations, and policies.
（11） Fully utilize existing government investment funds at the national and local levels to support the development of integrated circuit and software industries, encourage social capital to raise funds through multiple channels in accordance with market-oriented principles, establish investment funds, and improve the level of fund marketization.
（12） Encourage local governments to establish loan risk compensation mechanisms and support integrated circuit and software enterprises to obtain commercial loans through intellectual property pledge financing, equity pledge financing, accounts receivable pledge financing, supply chain finance, technology and intellectual property insurance, and other means. Fully leverage the role of financing guarantee institutions and actively provide various forms of financing guarantee services for small and micro enterprises in the integrated circuit and software fields.
（13） Encourage commercial financial institutions to further improve their financial services, increase their support for medium - and long-term loans to the integrated circuit and software industries, actively innovate credit products suitable for the development of the integrated circuit and software industries, and increase financial support for major projects under the premise of controllable risks and sustainable business; Guide insurance funds to carry out equity investment; Support non bank financial institutions such as bank wealth management companies, insurance companies, and trusts to initiate the establishment of specialized asset management products.
（14） We strongly support eligible integrated circuit and software enterprises to go public for financing both domestically and internationally, accelerate the domestic listing review process, and capitalize R&D expenses that meet the relevant conditions of the enterprise accounting standards. Encourage and support eligible enterprises to list and raise funds on the Science and Technology Innovation Board and the Growth Enterprise Market, and facilitate the exit channels for the original shareholders of relevant enterprises. Provide equity financing, equity transfer and other services to integrated circuit and software enterprises at different stages of development through different levels of capital markets, expand direct financing channels, and increase the proportion of direct financing.
（15） Encourage eligible integrated circuit and software enterprises to issue corporate bonds, corporate bonds, short-term financing bonds, and medium-term notes, broaden their financing channels, and support enterprises in raising funds from the bond market through medium and long-term bonds and other means.
3、 Research and development policies
（16） Focusing on the research and development of key core technologies for high-end chips, integrated circuit equipment and process technology, key materials for integrated circuits, integrated circuit design tools, basic software, industrial software, and application software, continuously exploring the construction of a new system for tackling key core technologies under the conditions of socialist market economy. The Ministry of Science and Technology, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other departments shall organize and implement relevant work, and actively utilize national key research and development plans, major national science and technology projects, etc. to provide support.
（17） In the fields of advanced storage, advanced computing, advanced manufacturing, high-end packaging and testing, key equipment materials, and new generation semiconductor technology, we will promote the construction of various innovative platforms based on industry characteristics. The Ministry of Science and Technology, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other departments will prioritize supporting the implementation of research and development projects on relevant innovation platforms.
（18） Encourage software companies to implement national standards such as software quality, information security, and development management. Strengthen the construction of integrated circuit standardization organizations, improve the standard system, strengthen standard verification, and enhance research and development capabilities. Improve the quality of integrated circuits and software, and enhance industry competitiveness.
4、 Import and export policies
（19） During a certain period of time, key integrated circuit design enterprises and software enterprises encouraged by the state may handle temporary import customs procedures for self use equipment (including development and testing equipment), software and hardware environments, prototypes and components, and electronic components that meet regulations. The import tax shall be implemented in accordance with current regulations.
（20） Financial institutions can provide financing and insurance support for software export contracts signed between software companies and foreign companies with higher credit ratings based on the principles of independent loan review and controllable risk.
（21） Promote the export of integrated circuits, software, and information technology services, vigorously develop international service outsourcing business, and support enterprises in establishing overseas marketing networks. The Ministry of Commerce, together with relevant departments and key countries and regions, has established a long-term cooperation mechanism and taken comprehensive measures to create conditions for enterprises to expand into emerging markets.
5、 Talent policy
（22） Further strengthen the construction of integrated circuits and software majors in universities, accelerate the establishment of primary disciplines for integrated circuits, closely adjust course settings, teaching plans, and teaching methods in a timely manner in line with the needs of industrial development, and strive to cultivate high-level talents with compound and practical abilities. Strengthen the construction of teaching staff, teaching laboratories, and internship training bases for integrated circuits and software majors. The Ministry of Education, in conjunction with relevant departments, will strengthen supervision and guidance.
（23） Encourage eligible universities to adopt cooperation with integrated circuit enterprises and accelerate the construction of demonstration microelectronics colleges. Priority should be given to building and cultivating integrated circuit industry education integrated enterprises. Pilot enterprises included in the construction and cultivation scope of industry education integrated enterprises, if their investment in vocational education meets the regulations, can offset the education surcharge and local education surcharge that the enterprise should pay in the current year at a ratio of 30% of the investment amount. Encourage investment funds related to social industries to increase investment, and support universities and enterprises to jointly carry out the construction of a special resource pool for integrated circuit talent cultivation. Support the cooperation between demonstration microelectronics colleges and characteristic demonstration software colleges with internationally renowned universities and multinational corporations, introduce foreign teachers and high-quality resources, and jointly cultivate integrated circuit and software talents.
（24） Encourage local governments to recognize and reward high-end talents who have made outstanding contributions in the field of integrated circuits and software, as well as high-level engineers and R&D designers, in accordance with relevant national regulations, and improve the equity incentive mechanism. Intensify efforts to introduce top experts, outstanding talents, and teams through relevant talent projects. Priority should be given to exploring policies related to the introduction of integrated circuit and software talents in industrial clusters or related industrial clusters. Develop and implement annual plans for the introduction and training of integrated circuit and software talents, promote the construction of national international training bases for integrated circuit and software talents, and focus on strengthening the medium and long-term training of urgently needed professional talents.
（25） Strengthen industry self-discipline, guide the rational and orderly flow of integrated circuit and software talents, and avoid vicious competition.
6、 Intellectual Property Policy
（26） Encourage enterprises to register exclusive rights and software copyrights for integrated circuit layout design. Support integrated circuit enterprises and software enterprises in applying for intellectual property rights in accordance with the law, and provide relevant support for those that comply with relevant regulations. Vigorously develop intellectual property services related to integrated circuits and software.
（27） Strictly implement the intellectual property protection system for integrated circuits and software, and increase the punishment for intellectual property infringement and illegal activities. Strengthen the protection of exclusive rights for integrated circuit layout design and software copyrights in network environments, actively develop and apply legitimate software network copyright protection technologies, and effectively protect the intellectual property rights of integrated circuits and software.
（28） Explore the establishment of a long-term mechanism for software legalization work. All computers sold within China (including large computers, servers, microcomputers, and laptops) must have pre installed software that is genuine. Computers with pre installed non genuine software are prohibited from being sold on the market. Fully implement policies and measures for government agencies to use genuine software, implement centralized government procurement for general software, and strengthen the management of software assets. Promote the institutionalization and standardization of the use of genuine software in important industries and key areas. Strengthen the promotion, training, supervision and inspection of the use of genuine software, and create a good environment for the use of genuine software.
7、 Market application policy
（29） Through policy guidance and market application as a driving force, we will increase the promotion of integrated circuit and software innovative products, driving continuous technological and industrial upgrading.
（30） Promote the cluster development of integrated circuit industry and software industry, support the construction of information technology service industry clusters and integrated circuit industry clusters, and support the distinctive and high-end development of software industry parks.
（31） Support backbone enterprises, research institutes, universities and other innovative entities in the field of integrated circuits and software to build various specialized innovation service institutions represented by specialized innovation spaces, optimize the allocation of innovation resources such as technology, equipment, capital, and market, provide specialized services focused on the field of integrated circuits and software according to market mechanisms, and achieve the integrated development of large, medium, and small enterprises. Increase support for specialized service platforms such as integrated circuit and software industries, technology enterprise incubators, and university science parks to enhance their professional service capabilities.
（32） Actively guide the development of information technology research and application business and service outsourcing. Encourage government departments to entrust the construction of e-government, data centers, and data processing work that fall within the scope of government responsibilities and are suitable for market-oriented provision to qualified software and information technology service institutions through the purchase of services. Urgently formulate and improve corresponding security review and confidentiality management regulations. Encourage large and medium-sized enterprises to rely on information technology research and application business institutions to establish specialized software and information technology service enterprises.
（33） Improve the system for protecting consumer privacy and trade secrets in the online environment, and promote the networked development of software and information technology services. Promote software products and services that meet security requirements in government agencies and public institutions at all levels.
（34） Further standardize the market order of the integrated circuit industry and software industry, strengthen anti-monopoly law enforcement, crack down on various monopolistic behaviors in accordance with the law, conduct anti-monopoly reviews of operators, and maintain fair competition in the integrated circuit industry and software industry markets. Strengthen law enforcement against unfair competition and crack down on various forms of unfair competition in accordance with the law.
（35） Give full play to the role of industry associations and standardization institutions, accelerate the formulation of integrated circuit and software related standards, promote integrated circuit quality evaluation and software development cost measurement standards.
8、 International cooperation policies
（36） Deepen global cooperation in the integrated circuit and software industries, and actively create a favorable environment for international enterprises to invest and develop in China. Encourage domestic universities and research institutes to strengthen cooperation with high-level universities and research institutions overseas, and encourage international enterprises to build research and development centers in China. Strengthen communication and exchange between domestic industry associations and international industry organizations, support domestic enterprises to cooperate with international enterprises both domestically and internationally, deeply participate in international market division of labor cooperation and international standard formulation.
（37） Promote the integrated circuit industry and software industry to go global. Facilitate domestic enterprises to jointly build research and development centers overseas, and better utilize international innovation resources to enhance the level of industrial development. The National Development and Reform Commission, Ministry of Commerce and other relevant departments have improved their service levels to create a favorable environment for enterprises to carry out investment and cooperation.
9、 Supplementary Provisions
（38） All eligible integrated circuit enterprises (including design, production, packaging, testing, equipment, and material enterprises) and software enterprises established within China, regardless of ownership nature, can enjoy this policy.
（39） This policy is interpreted by the National Development and Reform Commission in conjunction with departments such as the Ministry of Finance, the State Administration of Taxation, the Ministry of Industry and Information Technology, the Ministry of Commerce, and the General Administration of Customs.
（40） This policy shall be implemented from the date of issuance. Continue to implement the policies specified in the National Development [2000] No. 18 and National Development [2011] No. 4 documents. In case of any inconsistency between the relevant policies and this policy, this policy shall prevail.
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