High-tech IC design, etc. will be extended from May 1st

The State Administration of Taxation issued the “Announcement on the Issues Concerning the Expansion of the Application of Exemption and Refund Management Measures for Enterprises Scope Issues”. The “Announcement” clarified that in order to support the development of new domestic industries, since the 1st of May, the industrial and commercial registration time has been more than two years. The scope of tax reimbursement for IC design, software design, animation design companies and other high-tech enterprises will be expanded. This policy will reduce the tax burden of enterprises.

The "Announcement" pointed out that the above-mentioned high-tech enterprises may be exempted from tax refunds by the following businesses: independent research and development, design and production of other enterprises after the acquisition or processing of entrusted domestic production and processing of other enterprises after the recovery of the export of goods; commissioned after the processing of foreign enterprises imported The use of the company's branded goods exports; independent research and development, design software, loading of goods exported to the purchased hardware equipment; other circumstances stipulated by the State Administration of Taxation.

The new regulations will allow companies such as IC design companies to enjoy preferential tax rebate policies. According to previous regulations, the scope of tax exemptions for enterprises is limited to self-produced goods and does not include business models for entrusting other companies to process such products. After the issuance of the "Announcement," the diversified business models of enterprises can be included in the tax exemption scope.

After the new regulations are formally implemented, the above-mentioned enterprises may be exempted from VAT in production and sales. The input tax that should be refunded for raw materials, components, fuels, and power consumed by the export goods of the company may be offset against the taxes payable on domestic sales. If the amount of input tax that the company exports during the month should exceed the taxable amount, the tax refund may be refunded for the part that has not been reached.

Exemption from tax rebate is a preferential policy for export support. The new regulation means that high-tech companies such as IC design have obtained greater tax support in terms of export.