Notice of the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation
on
Import Duty Policies to Supporting the Development of the Integrated Circuit Industry and Software Industry
Finance and Tax (2021) No. 4
In order to implement the "Notice of the State Council on Printing and Distributing Several Policies to Promote the Development of Integrated Circuit Industry and Software Industry in the New Period" (Guo Fa [2020] No. 8), and in consent of the State Council, hereby notify the relevant import accounting policies as follows:
I. Import duties are exempted in the following situations:
(1) The import of consumable or raw materials, special construction materials for clean rooms, supporting systems and spare parts for integrated circuit production equipment (including imported equipment and domestic equipment) for self-use (here and below including R&D) by manufacturing companies of logic circuits with integrated circuit line widths less than 65 nanometers (or equal to, here and below), memory units, along with integrated circuit manufacturers of special technology with line widths less than 0.25 microns (i.e. analog, digital-analog hybrid, high voltage, radio frequency, power, optoelectronic integration, Image sensing, micro-electromechanical systems, silicon-on-insulator technology),
(2) The import of self-use production raw materials and consumables that can’t be manufactured domestically or performance of that from domestic ones can’t meet the requirements by manufacturers of compound integrated circuit with line widths less than 0.5 micrometers and companies in the field of advanced packaging and testing,
(3) The import of self-use production raw materials and consumables that can’t be manufactured domestically or performance of that from domestic ones can’t meet the requirements by manufacturers on key raw materials and spare parts for the integrated circuit industry (i.e. target materials, photoresists, recombined plates, package carriers, polishing pads, polishing fluids, 8-inch and above silicon single crystals, and 8-inch and above silicon wafers).
(4) The import of special construction materials for clean rooms, supporting systems and spare parts for integrated circuit production equipment (including imported equipment and domestic equipment) for self-use by manufacturers of photoresists, masks, and silicon wafers of 8 inches and above that are used in integrated circuits.
(5) The import of self-use equipment and the technology (along with software), accessories, and spare parts imported together with the equipment in accordance with a contract by state-supported key integrated circuit design companies and software companies as well as enterprises (integrated circuit manufacturers and advanced packaging and testing enterprises) that comply with items (1) and (2) of the article herein. However, this does not apply to the products listed in the Catalog of Imported Commodities Not Exempt from Import Duties for Domestic Investment Projects, the Catalog of Imported Commodities Not Exempt from Import Duties for Foreign-Funded Investment Projects, and the Catalog of Key Technological Equipment and Products Not Exempted from Import Duties. When the imported goods mentioned above do not count toward the total investment, the relevant projects do not need to issue project confirmation letters
II. Based on the status of domestic industrial development and technological progress, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation will work with the National Development and Reform Commission as well as the Ministry of Industry and Information Technology to make timely adjustment on the types of special crafts, key raw materials and parts specified in Article 1 of this notice.
III. Enterprises undertaking major integrated circuit projects that import new equipment from July 27th of 2020 to December 31st of 2030, who also can provide customs-approved tax guarantees for unpaid taxes, are allowed to pay the import value-added tax in installments over a period of 6 years (72 consecutive months) after the import of the first piece of equipment. For these 6 years (72 consecutive months), the enterprise shall pay 0%, 20%, 20%, 20%, 20%, and 20% of the total import value-added tax each year. Taxes paid since the date of import of the first piece of equipment will not be refunded. However, this does not apply to the products listed in the Catalog of Imported Commodities Not Exempt from Import Duties for Domestic Investment Projects, the Catalog of Imported Commodities Not Exempt from Import Duties for Foreign-Funded Investment Projects, and Catalogue of Key Technological Equipment and Products Not Exempted from Import Duties. During the installment payment period, the customs administration shall not levy late fees on the taxes paid in installments.
IV. Measures for the administration of import tax policies to support the development of the integrated circuit industry and the software industry shall be formulated and issued separately by the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation with the National Development and Reform Commission and the Ministry of Industry and Information Technology.
V. This notice will be implemented from July 27th of 2020 to December 31st of 2030. Starting from July 27, 2020, the tax that should have been exempted but have been collected will be refunded within 30 days of the date when the first group of tax-free import enterprises list is issued.
VI. From April 1st of 2021, the Notice of the Ministry of Finance on the Tax Policy for Certain Integrated Circuit Manufacturers Importing Raw Materials and Consumables for Self-Use in Production ( Cai Shui [2002] No. 136), Notice of the Ministry of Finance on the Tax Policy Issues Concerning Imported Clean Room Special Building Materials and Other Materials by Certain Integrated Circuit Manufacturers ( Cai Shui [2002] No. 152), Notice of the Ministry of Finance, the General Administration of Customs, the State Administration of Taxation, and the Ministry of Information Industry on the Preferential Tax Policies for Imported Raw Materials and Consumables for Self-Use in Production by Integrated Circuit Enterprises with Line Widths Less than 0.8 Microns (inclusive) ( Cai Guan Shui [2004] No. 45), and the Notice of the Ministry of Finance, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, and the State Administration of Taxation on Adjusting the List of Duty-Free Commodities for Raw Materials and Consumables Imported by Integrated Circuit Manufacturers for Self-Use in Production ( Cai Guan Shui [2015] No. 46) are repealed.
From July 27th of 2020 to March 31st of 2021, enterprises that are eligible for the benefits of both the four documents mentioned above and the relevant policies of Article 1 (1) and (2) of this notice, can choose either one of the relevant policies of the four documents mentioned herein or the relevant policies of items (1) and (2) of Article 1 of this notice out of self-selection on the same customs declaration form, the tax benefits in both options shall not be enjoyed cumulatively.
Ministry of Finance
the General Administration of Customs
State Administration of Taxation
March 16 2021
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