In the News: Tax Incentives for IC Companies; Corruption Probe for Ex-CSRC Boss; and Scrutiny for Private Equity Funds

May 26, 2019 | BY

Marilyn Romero

New tax incentives are issued for Chinese software and integrated circuitry companies, as international companies withdraw from Huawei's supply chain under U.S. pressure; former head of the CSRC, Liu Shiyu, is facing a likely corruption investigation; and China's private equity sector comes under CSRC scrutiny, with warnings issued to several firms.

Huawei

Integrated circuitry, software firms get more tax incentives

The Ministry of Finance and State Taxation Administration announced recently that the country's integrated circuit design and software enterprises will get more tax incentives under a new policy. In a statement, the ministry said qualified IC and software companies will benefit from income tax exemption in the first and second profit-making years. From third to the fifth years, the companies that meet certain requirements will be allowed a 50% reduction in income tax until expiry of the preferential period. The period will start from the first profit-making year prior to December 31, 2018, the ministry said. The Ministry of Finance and the State Taxation Administration first released tax preferential measures to develop the country's IC and software industries in 2012. Four governmental departments followed with their tax preferential measures in 2016, according to an ECNS report.

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