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Monday, December 4, 2023

China Continues Push to Develop Homegrown Chip Industry with New Tax Policies

BusinessChina Continues Push to Develop Homegrown Chip Industry with New Tax Policies

China has released its latest preferential tax policies for chip companies in 2023, as part of its broader push to encourage the development of the homegrown chip industry. The National Development and Reform Commission unveiled the policies on its official website on Wednesday, stating that eligible semiconductor manufacturing projects, chip designers, and other companies engaging in the chip industrial chain can apply for favorable tax policies.

These policies are aimed at boosting the growth of China’s chip industry, which has been seeking to become more self-reliant amidst geopolitical tensions and global semiconductor shortages. In recent years, the Chinese government has been investing heavily in the sector, with initiatives such as the “Made in China 2025” plan, which aims to increase the country’s domestic production of high-tech products, including chips.

The new tax policies will provide companies with a range of benefits, including reduced corporate income tax rates, preferential depreciation policies for fixed assets, and exemptions from import tariffs and value-added tax on imported equipment. These incentives are designed to encourage both domestic and foreign companies to invest in the Chinese chip industry and help it become more competitive globally.

It is worth noting that companies that received preferential tax treatment in 2022 must reapply in 2023 to continue enjoying the benefits. This policy is intended to ensure that companies are actively contributing to the development of the industry and are not just taking advantage of tax breaks.

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