China cuts tax rates for chip producers

Beijing. April 3. Silkroadnews - China announced plans to introduce tax incentives and reductions for chip producers, China Daily wrote.
According to the Ministry of Finance, the enterprises established after January 1, 2018, to produce chips thinner than 130 nanometers, will be exempted from the income tax for the first two years.
Tax rates will be 12.5% from the third year, which is a half of the statutory level.
The exemption period will be five years, if the chips are thinner than 65 nanometers or the investments amount to more than 15 billion yuan ($2.39 billion).
For the companies established before 2018, producing 0.25- and 0.8-micron chips, can take advantage of a similar favorable policy after making a profit.
Tax breaks were the country’s latest efforts to stimulate the production of high-performance chips, which was called the developing sector of strategic importance.
According to the analysts, the sector will contribute to the technological and industrial revolutions and promote the development of new mechanisms for economic growth. Over the past five years, the sector has shown a 20% annual growth rate.
China will provide more opportunities for foreign companies to invest in production of the integrated circuits and other manufacturing sectors.