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Semiconductor industry has not been extended preferential VAT refund
  Published: 2011-2-12
Last 5 years, the State Council "on the issuance of further encourage the development of the software industry and integrated circuit industries a number of policy notice" (the "Document No. 18"), the introduction of alternative policy yesterday, finally. Although the number of documents to support the software industry development initiatives, but much concern in the semiconductor industry value-added tax rebate incentives but did not continue.

Yesterday, the State Council promulgated the "further encourage the development of software industry and integrated circuit industries a number of policy", now come into force.

Prior to the January 12, Premier Wen Jiabao chaired a State Council executive meeting, study and plan to further encourage the software industry and IC industry development policy measures. At that time, the Shanghai Semiconductor Industry Association, Jiang Shou Lei to the "First Financial Daily" said that this was a signal the central government level, that is, the new document would implement a 18. Over the past half a month, really true.

Text of the original 18 developed in 2000. Since the introduction of software and IC industry in China has registered a rapid development, known as the "golden 10 years." However, so far, with many overseas countries and regions, the Chinese software industry and IC industry foundation is still relatively weak, innovation is not strong, the industry chain is also a lack of real autonomy.

The software industry, for example, the local revenue of all the software and not as a Microsoft; to the semiconductor, for example, all the mainland semiconductor company revenue was less than 10 in the giant world's first in Taiwan's MediaTek, the local semiconductor businesses of all Camp received less than Intel.

In 2005, under U.S. pressure, China has abolished the original document 18, a value-added tax on incentives. This was seen as the rise of U.S. concerns China's semiconductor industry, because tax benefits for the software industry did not cancel.

This offer is abolished, although other terms continue to follow, but the market still believes that the policy has been in a vacuum, because the original document has expired late last year, the New Deal urgently introduced. In 2006, the Ministry of Ding Wenwu, deputy director of electronic information told this newspaper revealed that 18 alternative policies have been included in the text of the State Council in 2006 legislative program, are expected soon. Fast forward 5 years, however its implementation.

New Deal than the difference between the original file, mainly to increase the investment and financing support elements. Most of the tax incentives are also able to continue and be strengthened. Such as tax incentives will continue to implement the software, to further implement and improve the related business tax incentives.

Semiconductor part of the process is less than 0.8 microns (inclusive) of the production enterprises, profitable year, the first year to second year exemption from corporate income tax, the third to the statutory tax rate of 25% five years halved, the so-called "Two exemption Three half"; while the process is less than 0.25 microns or investment of over 8.0 billion semiconductor manufacturing business will pay 15% income tax, which operate on more than 15 years, and profitable year, corporate income tax "five five half-free." Before the headache that the key semiconductor manufacturers equipment purchase rebates to be canceled, although not specifically respond to the New Deal, but stressed that the relevant departments by the Ministry of Finance policy.

However embarrassing, the semiconductor industry value-added tax rebate policy has not been renewed. In the eyes of many industry insiders, this is the key concessions. News analysis, said: "This may still be worried about the U.S. to make irresponsible remarks."

However, experts in semiconductor research, iSuppli senior analyst Gu Wenjun of China seems to give concessions in other areas the New Deal played down the impact of value-added part. For example, to support regional M & A, the State Council departments and local government will actively guide, "to prevent the setting of various forms of barriers." Moreover, a variety of venture capital fund of funds will also be involved in supporting small and medium software enterprises and integrated circuit business entrepreneurs, who in the past due to lack of financing passive fixed assets will significantly benefit from light.
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