Administrative Measures for the Recognition of Integrated Circuit Design Enterprises

　　Ministry of Industry and Information Technology Electronic [2013] No. 487

　　Chapter 1 General Provisions

　　Article 1: In accordance with the "Notice of the State Council on Issuing Several Policies to Encourage the Development of the Software and Integrated Circuit Industries" (Guofa [2000] No. 18), the "Notice of the State Council on Issuing Further Policies to Encourage the Development of the Software and Integrated Circuit Industries" (Guofa [2011] No. 4), and the "Notice of the Ministry of Finance and the State Administration of Taxation on Further Encouraging Corporate Income Tax Policies for the Development of the Software and Integrated Circuit Industries" (Cai Shui [2012] No. 27), this Regulation is hereby formulated to further accelerate the development of China's integrated circuit design industry and appropriately identify integrated circuit design enterprises.

　　Article 2: For the purposes of these Measures, an “integrated circuit design enterprise” refers to an enterprise legally established within the territory of China that engages in the research and development, design, and related services of integrated circuit functions and complies with the relevant provisions set forth in Document No. [2012]27 issued by the Ministry of Finance and State Administration of Taxation.

　　Article 3: The Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, and the State Administration of Taxation shall perform their respective duties and carry out related work accordingly.

　　Article 4: The Ministry of Industry and Information Technology is responsible for the identification and management of integrated circuit design enterprises nationwide. Its primary responsibilities are:

　　(1) Organize and carry out the identification of integrated circuit design enterprises nationwide and their annual review (hereinafter referred to as the annual review);

　　(2) Publicly announce the proposed list of integrated circuit design enterprises and the list of enterprises that have passed the annual review;

　　(3) Publish the list of enterprises certified as integrated circuit design companies and those that have passed the annual review, and issue certificates of recognition for integrated circuit design enterprises.

　　(4) Accepting and handling appeals challenging the results of certification and annual review.

　　Article 5: The departments in charge of industry and information technology of each province, autonomous region, directly-administered municipality, and city under separate planning (hereinafter referred to as the local departments of industry and information technology) are responsible for accepting applications for recognition or annual reviews submitted by integrated circuit design enterprises within their respective regions, as well as for verifying the authenticity of the submitted documentation.

　　Chapter 2: Criteria and Procedures for Recognition

　　Article 6: Integrated circuit design enterprises applying for recognition must meet the relevant provisions and conditions set forth in Document No. [2012]27 issued by the Ministry of Finance and State Administration of Taxation.

　　Article 7: Integrated circuit design enterprises undergoing their first annual review must meet the conditions stipulated in Document No. [2012]27 issued by the Ministry of Finance and State Administration of Taxation. For integrated circuit design enterprises undergoing their second or subsequent annual reviews, in addition to meeting the conditions specified in Document No. [2012]27 issued by the Ministry of Finance and State Administration of Taxation, the enterprise’s sales (operating) revenue for the previous accounting year must, in principle, be no less than (including) 2 million yuan.

　　Article 8: Enterprises applying for recognition as integrated circuit design enterprises and undergoing annual review must submit the following materials:

　　(1) Application Form for the Recognition of Integrated Circuit Design Enterprises (available for download from the website of the Ministry of Industry and Information Technology);

　　(2) A copy of the business license of the corporate entity, the tax registration certificate, and other relevant qualification certificates obtained by the enterprise (all of the above documents must be photocopies stamped with the official seal of the enterprise).

　　(3) A description of the number of enterprise employees, their educational structure, the status of research and development personnel, and the proportion they represent of the total number of enterprise employees, along with relevant supporting documents such as employment contracts for enterprise employees and proof of social insurance contributions;

　　(4) The financial statements for the enterprise’s previous accounting year, certified by a qualified intermediary agency recognized by the state (including the balance sheet, income statement, and cash flow statement), as well as tables detailing integrated circuit design sales (operating) revenue, self-developed integrated circuit design sales (operating) revenue, research and development expenses, and domestic research and development expenses;

　　(5) Supporting documents demonstrating that the enterprise has independently developed or owns intellectual property rights (such as patents, layout-design registrations, software copyrights, etc.);

　　(6) Supporting documents related to the enterprise’s production and operation premises, development environment, and technical support environment;

　　(7) Supporting documents related to product quality assurance (such as quality management certification certificates, user testimonials, etc.);

　　(8) Other relevant materials that need to be provided.

　　Article 9: The recognition and annual review of integrated circuit design enterprises shall be conducted according to the following procedures:

　　(1) Before the end of May each year, enterprises shall conduct a self-assessment in accordance with the requirements of Document No. [2012]27 issued by the Ministry of Finance and Taxation and these Measures. Those that meet the criteria for certification or annual review may submit an application for certification or annual review to the local authorities responsible for industry and information technology.

　　(2) The local departments of industry and information technology shall uniformly accept applications from enterprises within their respective regions, compile the application materials submitted by these enterprises, verify their authenticity, and submit a report on all enterprises applying within their region to the Ministry of Industry and Information Technology before the end of June of the reporting year. Local departments of industry and information technology shall not impose any restrictions on enterprises’ applications.

　　(3) The Ministry of Industry and Information Technology shall organize experts from technical, management, financial, and other fields to conduct a compliance review of the relevant information submitted by applicant enterprises, in accordance with Document No. [2012]27 issued by the Ministry of Finance and Taxation and Articles 6 and 7 of these Measures.

　　(4) The Ministry of Industry and Information Technology will make a determination based on the review results and publish, for a period of 30 days, on its official website a list of integrated circuit design enterprises proposed for certification and those that have successfully passed the annual review. During the publication period, any party with objections to the certification or annual review results may submit a written objection along with relevant supporting documentation to the Ministry of Industry and Information Technology. Within 10 working days after the end of the publication period, the Ministry of Industry and Information Technology will issue a decision on the handling of these objections.

　　(5) Based on the publicly announced information, the Ministry of Industry and Information Technology will publish, before the end of September of the application year, the list of integrated circuit design enterprises that have been certified and those that have passed the annual review. The list of certified and annually-reviewed enterprises, along with relevant supporting documents, will be copied to the National Development and Reform Commission, the Ministry of Finance, and the State Administration of Taxation.

　　Article 10: The Ministry of Industry and Information Technology issues certificates to integrated circuit design enterprises.

　　Article 11: Integrated circuit design enterprises that have been certified and passed the annual review may, with their valid integrated circuit design enterprise certificate for the current year, apply to the relevant authorities for enjoying corresponding tax preferential policies in accordance with the provisions of Document No. [2012]27 issued by the Ministry of Finance and State Administration of Taxation.

　　Article 12: The certification of integrated circuit design enterprises shall be subject to an annual review system. Enterprises that fail to submit their annual review report on time or that do not pass the annual review will have their qualification as integrated circuit design enterprises revoked, and their certification will automatically become invalid. Such revocation will be publicly announced on the website of the Ministry of Industry and Information Technology. Integrated circuit design enterprises that enjoy periodic tax reduction and exemption benefits in accordance with Document No. [2012]27 issued by the Ministry of Finance and State Administration of Taxation, if they fail to undergo the annual review during the preferential period or fail the annual review, will cease to enjoy the relevant tax preferential policies stipulated in Document No. [2012]27 from the year in which their certification becomes invalid.

　　Article 13: When a recognized integrated circuit design enterprise undergoes changes such as name change, division, merger, reorganization, or significant changes in its business operations, it shall, within 15 working days from the date of such change, submit a written report to the Ministry of Industry and Information Technology. If, after the change, the enterprise still meets the criteria for recognition as an integrated circuit design enterprise, it shall complete the corresponding amendment procedures; if, after the change, the enterprise no longer meets the criteria for recognition as an integrated circuit design enterprise, its qualification for recognition shall be terminated.

　　Article 14: The China Semiconductor Industry Association and its local counterpart organizations shall cooperate in conducting assessments of the implementation of relevant policies. The China Semiconductor Industry Association will compile and promptly submit a summary of such information to the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, and the State Administration of Taxation.

　　Article 15: The Ministry of Industry and Information Technology, local industrial and information technology authorities, and relevant institutions shall adhere to the principles of fairness, impartiality, scientific rigor, and efficiency in their assessment work, and shall maintain the confidentiality of commercial secrets of applicant enterprises.

　　Chapter 3: Supervision and Management

　　Article 16: If an integrated circuit design enterprise that has been certified and passed the annual review falls under any of the following circumstances, the Ministry of Industry and Information Technology shall revoke its certification and annual review qualification, refuse to accept its certification applications for three years, and publicly announce this decision on the Ministry’s official website.

　　(1) Providing false information during the application process;

　　(2) Engaging in tax evasion or fraud;

　　(3) Having committed serious violations in areas such as safety, quality, and corporate management, and having been penalized by the relevant authorities;

　　(4) Failure to promptly report changes in the enterprise’s qualification criteria, such as name changes, spin-offs, mergers, reorganizations, and significant changes in business operations.

　　For integrated circuit design enterprises that have had their qualification revoked and had already benefited from tax preferential policies in the same year, the relevant authorities shall recover the taxes previously granted.

　　Article 17: If any personnel involved in the certification process for integrated circuit design enterprises engage in any of the following behaviors, their respective departments or institutions shall order them to make corrections within a specified time limit and impose administrative disciplinary measures in accordance with the law. If such behavior constitutes a crime, criminal liability shall be pursued in accordance with the law.

　　(1) Violating the procedures and principles for the recognition process;

　　(2) Abuse of power, neglect of duty, engaging in favoritism and corruption, soliciting or accepting bribes;

　　(3) Violating confidentiality requirements and other stipulations related to the certification process;

　　(4) Other acts that violate the provisions of these Measures.

　　Chapter IV Supplementary Provisions

　　Article 18: Integrated circuit design enterprises that completed certification before January 1, 2011 shall continue to undergo annual reviews in accordance with the certification criteria set forth in the “Administrative Measures for the Certification of Integrated Circuit Design Enterprises and Products” (Ministry of Information Industry Joint Production [2002] No. 86) until the expiration of their preferential treatment period under the corporate income tax incentive policy. After the preferential period expires, these enterprises shall be re-certified in accordance with these Measures; however, they shall no longer be eligible for the preferential policies specified in Article 3 of Document No. [2012]27 issued by the Ministry of Finance and State Administration of Taxation.

　　Article 19: This Measures shall be interpreted jointly by the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, and the State Administration of Taxation.

　　Article 20: These Measures shall take effect as of January 1, 2014. At the same time, the “Administrative Measures for the Recognition of Integrated Circuit Design Enterprises and Products” (Ministry of Information Industry Joint Production [2002] No. 86) shall be repealed.