Big news! These integrated circuit companies are exempt from import tariffs!

Latest update time：2021-09-01 13:59

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On March 29, the Ministry of Finance website published the "Notice of the Ministry of Finance, General Administration of Customs and State Administration of Taxation on Import Tax Policies to Support the Development of Integrated Circuit Industry and Software Industry". The notice stated that enterprises producing logic circuits and memory with integrated circuit line width less than 65 nanometers; enterprises producing photoresists, masks, and 8-inch and above silicon wafers for integrated circuits, etc., are exempt from import tariffs.

The notice pointed out that this notice will be implemented from July 27, 2020 to December 31, 2030. From July 27, 2020, to 30 days after the first list of duty-free import enterprises is issued, the tax exemption that has been collected will be refunded.

(Source: Ministry of Finance)

In what cases are import duties exempted?

Logic circuit and memory manufacturers with integrated circuit line widths less than 65 nanometers (inclusive, the same below), and integrated circuit manufacturers with special processes (i.e. analog, mixed digital and analog, high voltage, radio frequency, power, optoelectronic integration, image sensing, micro-electromechanical systems, and silicon-on-insulator processes) with line widths less than 0.25 microns, are allowed to import raw materials and consumables for self-use (including research and development, the same below), special building materials for clean rooms, supporting systems, and spare parts for integrated circuit production equipment (including imported and domestic equipment) that cannot be produced domestically or whose performance cannot meet demand.

Compound integrated circuit manufacturers with integrated circuit line widths less than 0.5 microns and advanced packaging and testing companies are allowed to import productive raw materials and consumables for their own use that cannot be produced domestically or whose performance does not meet their needs.

Manufacturers of key raw materials and spare parts (i.e. targets, photoresists, masks, packaging carriers, polishing pads, polishing fluids, 8-inch and larger silicon single crystals, and 8-inch and larger silicon wafers) for the integrated circuit industry are allowed to import productive raw materials and consumables for their own use that cannot be produced domestically or whose performance cannot meet demand.

Manufacturers of photoresists, masks, and 8-inch and larger silicon wafers for integrated circuits may import special building materials, supporting systems, and spare parts for clean rooms that cannot be produced domestically or whose performance does not meet demand.

Key integrated circuit design enterprises and software enterprises encouraged by the state, as well as enterprises that meet the requirements of Items (i) and (ii) of this Article (integrated circuit manufacturing enterprises and advanced packaging and testing enterprises) import equipment for their own use, and technologies (including software) and accessories and spare parts imported with the equipment in accordance with the contract, except for the commodities listed in the "Catalogue of Imported Goods Not Duty-Free for Domestic Investment Projects", "Catalogue of Imported Goods Not Duty-Free for Foreign Investment Projects" and "Catalogue of Major Technical Equipment and Products Not Duty-Free for Import". The above-mentioned imported goods do not occupy the total investment amount, and the relevant projects do not need to issue a project confirmation letter.

Based on domestic industrial development, technological progress and other conditions, the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation will work with the National Development and Reform Commission and the Ministry of Industry and Information Technology to make timely adjustments to the special process types and key raw materials and spare parts types in Article 1 of this notice.

Enterprises undertaking major integrated circuit projects From July 27, 2020 to December 31, 2030 For importing new equipment, except for the goods listed in the "Catalogue of Imported Goods Not Duty-Free for Domestic Investment Projects", "Catalogue of Imported Goods Not Duty-Free for Foreign Investment Projects" and "Catalogue of Major Technical Equipment and Products Not Duty-Free for Import", provide tax guarantees recognized by the customs for the unpaid taxes, and be allowed to pay the import VAT in installments within 6 years (72 consecutive months) after the first equipment is imported. Within 6 years, pay 0%, 20%, 20%, 20%, 20% of the total import VAT every year (12 consecutive months) in sequence. The taxes paid since the date of the first equipment import will not be refunded. During the installment payment period, the customs will not impose late payment fees on the taxes allowed to be paid in installments.

From April 1, 2021, the "Notice of the Ministry of Finance on the Tax Policy for Imported Productive Raw Materials and Consumables for Self-Use by Some Integrated Circuit Manufacturers" (Finance and Taxation [2002] No. 136), the "Notice of the Ministry of Finance on the Tax Policy Issues on Imported Special Building Materials and Other Materials for Clean Rooms by Some Integrated Circuit Manufacturers" (Finance and Taxation [2002] No. 152), the "Notice of the Ministry of Finance, the General Administration of Customs, the State Administration of Taxation, and the Ministry of Information Industry on the Tax Preferential Policy for Integrated Circuit Manufacturers with a Line Width Less than 0.8 Microns (Inclusive) Imported Productive Raw Materials and Consumables for Self-Use" (Finance and Customs Tariff [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 Goods for Integrated Circuit Manufacturers to Import Productive Raw Materials and Consumables for Self-Use" (Finance and Customs Tariff [2015] No. 46) will be abolished.

From July 27, 2020 to March 31, 2021, duty-free import enterprises that can enjoy the relevant policies of the above four documents in this article and the relevant policies of Article 1, Items (a) and (b) of this Notice may choose to apply the relevant policies of the above four documents in this article or the relevant policies of Article 1, Items (a) and (b) of this Notice for the same customs declaration form, and shall not enjoy tax benefits cumulatively.

Will the list of companies exempted from import tariffs be published?

At the same time, the Ministry of Finance website announced 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 the Management Measures for Import Tax Policies to Support the Development of the Integrated Circuit Industry and the Software Industry".

The management measures clearly state that the National Development and Reform Commission will work with the Ministry of Industry and Information Technology, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation to formulate and jointly issue a list of integrated circuit manufacturers, advanced packaging and testing companies, and key raw materials and spare parts manufacturers for the integrated circuit industry that enjoy exemption from import tariffs.

The full text is as follows:

To the finance departments (bureaus), development and reform commissions, and industrial and information technology departments of all provinces, autonomous regions, municipalities directly under the Central Government, and cities with independent planning status, the Finance Bureau, Development and Reform Commission, and Industry and Information Technology Bureau of the Xinjiang Production and Construction Corps, the Guangdong Branch of the General Administration of Customs, and all directly affiliated customs, the taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, and cities with independent planning status under the State Administration of Taxation, the local supervision bureaus of the Ministry of Finance, and the local special commissioner offices of the State Administration of Taxation:

In order to implement the "Notice of the Ministry of Finance, General Administration of Customs and State Administration of Taxation on Import Tax Policies to Support the Development of Integrated Circuit Industry and Software Industry" (Cai Guan Shui [2021] No. 4, hereinafter referred to as the "Notice"), the policy management measures are hereby notified as follows:

1. The National Development and Reform Commission, together with the Ministry of Industry and Information Technology, the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation, will formulate and jointly issue a list of integrated circuit manufacturers, advanced packaging and testing companies, and key raw materials and spare parts manufacturers for the integrated circuit industry that enjoy exemption from import tariffs.

2. The National Development and Reform Commission, the Ministry of Industry and Information Technology, together with the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation, will formulate and jointly issue a list of key integrated circuit design companies and software companies encouraged by the state that enjoy exemption from import tariffs.

3. The Ministry of Industry and Information Technology, together with the National Development and Reform Commission, the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation, will formulate and jointly issue a list of duty-free imported goods for self-use productive (including R&D) raw materials, consumables and special building materials for clean rooms, supporting systems and spare parts for production equipment (including imported equipment and domestic equipment) that cannot be produced domestically or whose performance cannot meet demand.

4. The National Development and Reform Commission, together with the Ministry of Industry and Information Technology, shall formulate the standards for major integrated circuit projects that can enjoy the VAT installment payment at the import stage of new equipment and the conditions for the construction enterprises that can enjoy the installment payment, and determine the recommended list of major integrated circuit projects and the recommended list of construction enterprises based on the above standards and conditions, and notify the Ministry of Finance in a letter, with a copy to the General Administration of Customs and the State Administration of Taxation. The Ministry of Finance, together with the General Administration of Customs and the State Administration of Taxation, shall determine the list of major integrated circuit projects and the list of construction enterprises, and notify the provincial (including provinces, autonomous regions, municipalities directly under the Central Government, cities with independent planning status, and Xinjiang Production and Construction Corps, the same below) finance departments (bureaus), the customs directly under the location of the enterprise, and the provincial tax bureaus.

The construction enterprise shall apply to the provincial finance department (bureau) 3 months before the import of the first new equipment under the major integrated circuit project it undertakes to enjoy installment tax payment, attaching information such as the project investment amount, equipment import time, annual import amount of new equipment, annual import value-added tax amount of new equipment, tax guarantee plan, etc., and copy to the customs and provincial tax bureau directly under the enterprise's location. The provincial finance department (bureau) will submit the application to the Ministry of Finance after preliminary review together with the customs and provincial tax bureau directly under the enterprise's location, and copy to the General Administration of Customs and the State Administration of Taxation.

The Ministry of Finance, together with the General Administration of Customs and the State Administration of Taxation, will determine the installment tax payment plan for major integrated circuit projects (including project name, name of the contracting enterprise, start and end time of installment tax payment, total installment tax amount, quarterly tax amount, etc.), and notify the provincial-level finance department (bureau), the customs directly under the enterprise's location, and the provincial-level taxation bureau, which will then inform the relevant enterprises.

During the implementation of the installment tax payment plan, if the project name changes, and the name and business scope of the construction enterprise change, the construction enterprise shall submit a change statement to the provincial finance department (bureau), the customs directly under the enterprise's location, and the provincial tax bureau within 60 days from the date of completion of the change registration, and apply for changes to the corresponding content of the installment tax payment plan. The provincial finance department (bureau) will determine the change results together with the customs directly under the enterprise's location and the provincial tax bureau, and the provincial finance department (bureau) will notify the customs directly under the enterprise's location by letter, copy to the provincial tax bureau, and report to the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation for filing. The customs directly under the enterprise's location will inform the construction enterprise of the change results. If the construction enterprise submits a change statement beyond the aforementioned time of this paragraph, the provincial finance department (bureau), the customs directly under the enterprise's location, and the provincial tax bureau will not accept it, and the project will no longer enjoy installment tax payment. The unpaid taxes on imported equipment should be paid within 3 months from the next month after the completion of the change registration.

Imported new equipment that enjoys installment tax payment should be declared for import in the customs area directly under the enterprise's location. According to the provisions of customs affairs guarantee, the construction enterprise shall provide a tax guarantee recognized by the customs for the unpaid taxes. The customs shall not impose late payment fees on taxes that are allowed to be paid in installments. When the construction enterprise pays taxes for the last time, the customs shall complete the final settlement of all taxes payable for the project. If the regulations are violated and the taxes are not paid on time after the deadline, the project will no longer enjoy installment tax payment, and the unpaid taxes of the imported equipment should be paid within 3 months from the next month after the overdue situation occurs.

5. The enterprise imported equipment referred to in Article 1(5) and Article 3 of the Notice shall also be subject to the cumulative scope of the commodities listed in the "Catalogue of Imported Commodities Not Exempted from Duty for Domestic Investment Projects", "Catalogue of Imported Commodities Not Exempted from Duty for Foreign Investment Projects" and "Catalogue of Major Technological Equipment and Products Not Exempted from Duty for Import" during the period of import declaration.

6. Duty-free import enterprises should go through the tax reduction and exemption procedures for imported goods in accordance with relevant customs regulations.

VII. In Articles 1 and 2 of these Measures, the first batch of duty-free import enterprise lists drawn up by the National Development and Reform Commission or drawn up by the National Development and Reform Commission and the Ministry of Industry and Information Technology will be implemented from July 27, 2020, and the tax exemptions that have been collected will be refunded within 30 days after the publication of the list. In Article 3 of these Measures, the first batch of duty-free imported goods lists drawn up by the Ministry of Industry and Information Technology will be implemented from July 27, 2020. The duty-free import enterprise lists and duty-free imported goods lists drawn up in subsequent batches will be implemented from the 20th day after their publication.

8. If the duty-free import enterprises in Articles 1 and 2 of these Measures have changes in their names or business scope, they shall submit a statement of the relevant changes to the lead department within 60 days from the date of completion of the change registration. The lead department shall determine whether the changed enterprise can continue to enjoy the policy from the date of change registration in accordance with the provisions of Articles 1 and 2 of these Measures. If an enterprise submits a statement of change beyond the aforementioned time of this article, the lead department will not accept it, and the enterprise will stop enjoying the policy from the date of change registration. The determination result or non-acceptance situation shall be notified by the lead department to the General Administration of Customs (if there are many determination results, at least two batches of letters shall be notified each year), and copied to other departments in Articles 1 and 2.

IX. Duty-free import enterprises should use duty-free imported goods in accordance with relevant regulations. If they violate the regulations and transfer, divert or dispose of duty-free imported goods without authorization, and are subject to criminal liability in accordance with the law, they will stop enjoying the policy during the remaining validity period of the Notice.

10. If a duty-free import enterprise obtains duty-free status by false reporting, the National Development and Reform Commission will verify the matter together with the Ministry of Industry and Information Technology, the Ministry of Finance, the General Administration of Customs, the State Administration of Taxation and other departments. The National Development and Reform Commission will notify the General Administration of Customs in writing. From the date of the notification, the enterprise will stop enjoying the policy during the remaining validity period of the "Notice".

11. If the finance and other relevant departments and their staff violate the provisions of the policy during the policy implementation process, or commit illegal and disciplinary violations such as abuse of power, dereliction of duty, favoritism and fraud, they shall be held accountable in accordance with relevant national regulations; if they are suspected of committing a crime, they shall be held criminally liable in accordance with the law.

12. This Measures shall be valid from July 27, 2020 to December 31, 2030.

Ministry of Finance National Development and Reform Commission Ministry of Industry and Information Technology General Administration of Customs State Administration of Taxation

March 22, 2021

Release date: March 29, 2021

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This article is compiled by Xinshiye from the Ministry of Finance official website , etc. The content is only for communication and learning purposes. If you have any questions, please contact us at info@gsi 24.com.

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