The Municipal Finance Commission, Municipal Development and Reform Commission, Municipal Economy, Trade and Information Commission, Municipal State Taxation Bureau and Municipal Local Taxation Bureau have jointly put together the Administrative Measures for Filing and Verification of Favorable Income Tax Status of Enterprises in Software and Integrated Circuit Industries (hereinafter referred to as the Measures).
The Measures specify the specific work of each department in implementing the preferential policies for corporate income tax. In addition, enterprises of the software and integrated circuit industries that are qualified as per the Measures can have preferential taxation policies as stipulated in the Notice of the Ministry of Finance and the State Administration of Taxation on Enterprise Income Tax Policies to Further Encourage the Development of the Software Industry and Integrated Circuit Industry.
For the implementation of preferential policies for corporate income tax, the Measures spell out the specific work of each department. The filing materials of enterprises whose income tax is under the jurisdiction of state tax are to be processed by the Municipal State Tax Department; and by the Municipal Local Tax Department for enterprises whose income tax is under the jurisdiction of the local tax.
The Municipal Development and Reform Commission will verify the list of enterprises that submitted the favorable income tax status application for integrated circuit manufacturing enterprises, key software enterprises and integrated circuit design enterprises included in national planning and layout, as well as their filing materials.
The Municipal Economy, Trade and Information Commission will verify the list of enterprises that submitted the favorable income tax status application for software enterprises, integrated circuit design enterprises, as well as their filing materials.
The software and integrated circuit enterprises mentioned in the Measures refer to integrated circuit manufacturing enterprises, integrated circuit design enterprises, software enterprises, key software enterprises and integrated circuit design enterprises included in the national planning and layout. Enterprises that apply for favorable income tax status for software and integrated circuit enterprises shall, in accordance with the requirements for relevant fiscal and taxation documents, submit filing materials in duplicate to the municipal taxation department, and supplement relevant materials in accordance with the requirements of the municipal taxation department and actively cooperate with verification work.
Enterprises shall meet several conditions that vary as per different enterprise type that qualifies for application. Integrated circuit manufacturing enterprises need to be legally registered in China (excl. Hong Kong, Macao and Taiwan China) and become resident enterprises filed with the development and reform, industry and information technology sectors; need to make annual final settlements, the staff with labor contract relationship and with two year or above college degrees should account for not less than 40% of the monthly average total number of employees, of which R&D staff should account for not less than 20% of the monthly average total number of employees.
