China introduces new measures to boost software, integrated circuit sectors

08:22, February 10, 2011      

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China has introduced new stimulus policies to boost the development of the software and integrated circuit (IC) industries.

Software firms will continue to enjoy preferential value-added tax policies, according to a circular posted on the central government's website, on Wednesday. The circular was dated Jan. 28.

The new policies also granted tax cuts to manufacturers of integrated circuit. Enterprises of IC products whose product line is less than 0.8 micron (including 0.8 micron) wide will be exempted from corporate income taxes on the first and the second year after reaching profitability, according to the statement.

Taxes will also be halved for such companies from the third to fifth year after reaching profitability.

Makers of IC products that have a product line that is less than 0.25 micron wide or have invested more than 8 billion yuan (1.21 billion U.S. dollars) in production will pay reduced income taxes.

For companies that have operated for more than 15 years, corporate income taxes will be exempted from the first year to the fifth after reaching profitability.

Between the sixth and the tenth year, the firms will pay half of the taxes, the statement said.

The government also encouraged consolidation in the software and IC industries and will provide financial support to technological research and development.Source: Xinhua
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