Circular of the State Council on Printing and Distributing Policies for Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry
Circular of the State Council on Printing and Distributing Policies for Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry
Circular of the State Council on Printing and Distributing Policies for Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry
Guo Fa [2011] No. 4
January 28, 2011
To people's government of all provinces, autonomous regions and municipalities directly under the Central Government, and all departments and ministries of and institutions directly under the State Council:
The Policies for Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry are hereby distributed to you for your earnest compliance and implementation.
The software industry and the integrated circuit industry are the emerging strategic industries of China and important foundation for the national economy and social informationalization. In recent years, with the support of a series of policies and measures released by China and joint efforts from all respects, China's software industry and integrated circuit industry have been developing fast. Formulation and implementation of the Policies for Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry, which continuously improves incentive measures and defines policy direction, will be of importance in respects of optimizing industry development environment, strengthening scientific and technological innovation ability and increasing industry development quality and level. All regions and relevant departments shall pay great attention, strengthen organization, leadership and cooperation, make great efforts to formulate implementing rules and support measures as soon as possible and effectively implement these policies. The National Development and Reform Commission (NDRC) shall work with relevant departments to promptly follow and get to know the implementation of these policies and strengthen supervision and guidance so as to ensure that effective results are achieved.
Policies for Further Encouraging the Development of the Software Industry and the Integrated Circuit Industry
Since issuance of the Circular of the State Council on Printing and Distributing the Several Policies for Encouraging Development of the Software Industry and the Integrated Circuit Industry (Guo Fa [2000] No. 18, hereinafter referred to as the Document Guo Fa No. 18), the software industry and integrated circuit industry in China has developed fast with speedy increase of industrial scale and remarkable improvement of technological level and has effectively facilitated the development of the national informationalization. But comparing with the international advanced level, such problems still exist in China's software industry and integrated circuit industry as that the development foundation is weaker, enterprises do not have a strong technological innovation and self-development ability, the application and development level are in urgent need of improvement and that the industry chain needs to be improved. For the purposes of further optimizing development environment for the software industry and integrated circuit industry, increasing industry development quality and level and cultivating a number of influential and strong leading enterprises in these industries, the following policies are formulated.
I. Financial and tax policies
1. Preferential VAT policies for software shall continue to be implemented.
2. Relevant preferential business tax policies shall be further implemented and improved. Eligible software enterprises and integrated circuit design enterprises, which engage in software development and testing, information system integration, consulting and operation maintenance, integrated circuit design and other businesses, shall be exempt from business tax and relevant procedures for them shall be simplified. Specific measures shall be formulated by the Ministry of Finance (MOF), the State Administration of Taxation (SAT) together with relevant departments.
3. Upon certification, enterprise income tax shall be exempt from integrated circuit enterprises manufacturing integrated circuits with a linewidth of less than 0.8 micrometer (included) for the first and second year following the profit making year, and enterprise income tax shall be levied thereon at half of the statutory rate of 25% for the third through fifth year thereafter (hereinafter referred to as "'2-year exemption and 3-year reduction by half' preferential enterprise income tax policy").
4.
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