New preferential policies for the semiconductor industry

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New preferential policies for the semiconductor industry [Copy link]

New national policy to support semiconductor industry is expected to be released in the second half of the year

2006-7-7

Li Ke, director of the China Semiconductor Industry Association, revealed that the country’s new policy to support the semiconductor (IC) industry is expected to be officially released in the second half of the year.

　　"The new industrial policy has not yet been finalized in details, and there are several versions." Yang Xueming, a major participant in the original Document No. 18 ("Several Policies to Encourage the Development of the Software Industry and the Integrated Circuit Industry"), said that the new policy has solicited opinions from multiple parties including government departments, enterprises and industry experts, showing the country's emphasis on the new policy.

　　Recently, a person in charge of the China Semiconductor Industry Association revealed some key points of the new policy in Shanghai, such as adopting a compound preferential policy of credit and tax reduction for R&D, implementing tax exemption and tax refund policies for semiconductor equipment, providing special financial support for design companies, and the government setting up special funds. When the government special fund is launched, it will invest 12 million to 25 million US dollars in the first year, and then increase year by year.

　　Yang Xueming revealed that the United States has been confusing the concepts of "tax rate" and "tax burden" in Document No. 18, and thus concluded that Document No. 18 violates WTO trade rules.

　　VAT and tax refund will continue to be the most important details in the new industrial policy. However, it is precisely because of the 17% VAT details for domestically sold chips in the original Document No. 18 (local companies can enjoy a 14% tax refund) that the United States determined that it violated the WTO's trade principles and constituted regional industry protection. Therefore, the formulation of the details of the new policy here will definitely be different from Document No. 18.

　　The delay in the release of the new policy seems to be related to the details of value-added tax and tax refunds. An industry insider who wishes to remain anonymous said that this policy will be related to the regulations of many relevant government departments, such as the Customs, the Ministry of Finance, the State Administration of Taxation, etc. Each department must conduct corresponding approvals to ultimately promote policy details suitable for the development of China's semiconductor industry, which to some extent affects the final release time of the new policy.