Announcement on Enterprise Income Tax Policies for Integrated Circuit Design and Software Industries

(Issued by the Ministry of Finance and the State Administration of Taxation as on May 17, 2019.)

MOF and SAT Announcement [2019] No.68

With a view to supporting the development of the integrated circuit design and software industries, we hereby announce relevant enterprise income tax policies as follows:

1 . For a qualified integrated circuit design enterprise or software enterprise established in accordance with the law, its period of eligibility for the tax breaks shall commence to count from the year in which it becomes profitable before December 31, 2018.  During the first and second years it shall be exempt from enterprise income tax and from the third to the fifth years it shall be subject to enterprise income tax at half of the statutory tax rate of 25% until the end of the eligibility period.

2 . For the purposes of Article 1 of this Announcement, the term “qualified” means satisfying the conditions set forth in the Ministry of Finance and State Administration of Taxation, Circular on Enterprise Income Tax Policies to Further Encourage the Development of the Software Industry and the Integrated Circuit Industry (Cai Shui [2012] No.27) and the Ministry of Finance, State Administration of Taxation, National Development and Reform Commission and Ministry of Industry and Information Technology, Circular on Issues Relevant to Favorable Enterprise Income Tax Policies for Software and Integrated Circuit Industries (Cai Shui [2016] No.49).