Notice on Requirements for Properly Preparing the List of Integrated Circuit Enterprises or Projects and Software Enterprises Eligible for Tax Preferential Policies

NDRC High-Tech [2021] No. 413

Development and Reform Commissions, departments of industry and information technology, and finance departments (bureaus) of all provinces, autonomous regions, municipalities directly under the central government, cities under separate planning, and the Xinjiang Production and Construction Corps; the Guangdong Branch of the General Administration of Customs; all directly affiliated customs offices; and the tax bureaus of all provinces, autonomous regions, municipalities directly under the central government, and cities under separate planning:
  In accordance with the "Notice of the State Council on Issuing Several Policies for Promoting the High-Quality Development of the Integrated Circuit Industry and the Software Industry in the New Era" (Guofa [2020] No. 8, hereinafter referred to as the "Several Policies") and its supporting regulations, and in order to properly prepare the list of integrated circuit enterprises or projects and software enterprises eligible for tax preferential policies (hereinafter referred to as the "List"), we hereby notify you of the relevant procedures, eligibility criteria for enterprises enjoying tax preferential policies, and project standards as follows:
  I. The “list” referred to in this notice refers to the list of integrated circuit enterprises or projects encouraged by the state, as mentioned in Article (1) of the “Several Policies,” specifically those with feature sizes of less than 28 nanometers (inclusive), less than 65 nanometers (inclusive), and less than 130 nanometers (inclusive). It also includes the key integrated circuit design enterprises and software enterprises encouraged by the state as specified in Articles (3), (6), (7), and (8) of the “Several Policies,” as well as the “Notice from the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation on Import Tax Policies Supporting the Development of the Integrated Circuit and Software Industries” (Cai Guan Shui [2021] No. 4) and the “Notice from 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 Supporting the Development of the Integrated Circuit and Software Industries” (Cai Guan Shui [2021] No. 5). This list further encompasses logic circuit and memory manufacturers with feature sizes of 65 nanometers (inclusive) or less, specialized-process integrated circuit manufacturers with feature sizes of 0.25 microns (inclusive) or less, compound integrated circuit manufacturers and advanced packaging and testing enterprises with feature sizes of 0.5 microns (inclusive) or less, manufacturers of critical raw materials and components for the integrated circuit industry (including targets, photoresists, photomasks, sealing substrates, polishing pads, polishing liquids, silicon single crystals 8 inches and above, silicon wafers 8 inches and above), and the list of major integrated circuit projects and their undertaking enterprises.
  II. Enterprises applying to be included on the list shall, in principle, submit their applications and the necessary supporting documents (in both electronic and paper formats) via the information reporting system (https://yyglxxbs.ndrc.gov.cn/xxbs-front/) from March 25 to April 16 each year. If, due to special circumstances, the audit cannot be completed on time, enterprises may first submit their unaudited financial statements and, within 10 working days after April 16, supplement their application by submitting the audited financial statements through the information reporting system. The applications should be submitted to the Development and Reform Commission or the department in charge of industry and information technology of each province, autonomous region, municipality directly under the central government, city under separate planning, and the Xinjiang Production and Construction Corps (the specific receiving agency will be determined by the local Development and Reform Commission).
  3. The Development and Reform Commissions and the departments in charge of industry and information technology of all provinces, autonomous regions, municipalities directly under the central government, cities separately listed in the plan, and the Xinjiang Production and Construction Corps (hereinafter referred to as “local development and reform and industry and information technology authorities”) shall, based on the enterprise qualifications and project standards (attached hereto), conduct a preliminary review and make recommendations on the information submitted by enterprises before forwarding such information to the National Development and Reform Commission and the Ministry of Industry and Information Technology. The lists of key raw materials and component manufacturers for the integrated circuit industry, referred to in Articles (1), (3), (6), and (7) of the “Several Policies,” as well as in Document No. 4 [2021] issued by the Ministry of Finance and Customs, shall be jointly reviewed and confirmed by the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation, and shall be jointly issued. As for the major integrated circuit projects mentioned in Article (8) of the “Several Policies,” after the National Development and Reform Commission and the Ministry of Industry and Information Technology have drawn up the relevant list, they shall notify the Ministry of Finance in writing. The Ministry of Finance, together with the General Administration of Customs and the State Administration of Taxation, will then make the final determination.
  4. Prior to the issuance of the list, enterprises may, in accordance with relevant tax administration regulations, initially enjoy applicable domestic tax preferential policies based on their enterprise qualifications and project standards. After the list is issued, if an enterprise has not been included on the list, it shall, as required, make up for any corporate income tax that it has already enjoyed as a preferential treatment. Enterprises applying to enjoy the preferential treatments referred to in Articles (1), (3), (6), and (7) of the “Several Policies,” as well as those eligible for the tariff preferential policies mentioned in Document No. 4 [2021] of the Ministry of Finance and Customs, may check through the information filing system before the end of the annual tax reconciliation and final settlement to determine whether they have been included on the list. For enterprises eligible for the preferential treatment under Article (8) of the “Several Policies,” the directly affiliated customs authority at the enterprise’s location will notify the relevant enterprises accordingly.
  V. Enterprises or projects that have already benefited from the tariff preferential policies referred to in Articles (1), (3), (6), and (7) of the “Several Policies,” as well as those mentioned in Document No. 4 [2021] issued by the Ministry of Finance and Customs, shall promptly report to the local development and reform authorities and industrial and information technology authorities—and submit relevant supporting documents—if they undergo name changes, splits, mergers, reorganizations, or significant changes to their primary business activities. The National Development and Reform Commission and the Ministry of Industry and Information Technology, together with relevant departments, will determine, based on the nature of the changes, whether the enterprises or projects continue to meet the eligibility criteria or project standards.
  6. Local development and reform authorities, together with departments of industry and information technology, shall work in coordination with the finance, customs, and tax authorities to strengthen daily supervision over enterprises listed on the registry. During the course of supervision, if it is discovered that an enterprise has obtained tax reduction or exemption eligibility by submitting false information, the relevant authorities shall promptly conduct a joint verification and jointly report the findings to the National Development and Reform Commission and the Ministry of Industry and Information Technology for review. After review by the National Development and Reform Commission and the Ministry of Industry and Information Technology together with other relevant departments, any enterprise or project found not to meet the prescribed eligibility criteria and project standards shall be notified in writing to the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation for handling in accordance with applicable regulations.
  7. Enterprises shall be responsible for the authenticity of the materials and data they provide. Applying enterprises shall sign a commitment letter, pledging that if any act of dishonesty is discovered during the application process, they will accept the handling measures imposed by the relevant authorities in accordance with applicable laws, regulations, and national provisions. Information on any illegal activities will be recorded in the enterprise’s credit record, incorporated into the National Credit Information Sharing Platform, and publicly disclosed on the “Credit China” website.
  8. This notice shall take effect from the date of its issuance and shall apply to enterprises enjoying the corporate income tax preferential policies for the year 2020 as well as the import tax policies stipulated in Cai Guan Shui [2021] No. 4. The National Development and Reform Commission and the Ministry of Industry and Information Technology, together with relevant departments, will, based on factors such as industrial development and technological progress, make timely adjustments to the eligibility criteria for enterprises or project standards that qualify for these preferential policies.
  Attachment: 1. Eligibility Criteria and Project Standards for Enterprises Enjoying Tax Preferential Policies
     2. Key areas in integrated circuit design and key areas in software development
     3. Detailed list of materials submitted by integrated circuit enterprises, projects, and software enterprises eligible for tax preferential policies
     4. Table of Major Changes in the Enterprise

National Development and Reform Commission
Ministry of Industry and Information Technology
Ministry of Finance
General Administration of Customs
State Administration of Taxation
March 29, 2021