The following PRC government notice announces import duty exemptions for several types of goods and materials related to semiconductor and microchip manufacturing. The tax waivers only apply to items that China’s domestic industries cannot currently supply at an acceptable level of quality.
The Chinese source text is available online at: http://www.gov.cn/zhengce/zhengceku/2021-03/29/content_5596564.htm
An archived version of the Chinese source text is available at: https://perma.cc/A2PA-7A6Y
U.S. $1 ≈ 6.5 Chinese Yuan Renminbi (RMB), as of April 12, 2021.
To the finance departments (bureaus) of all provinces, autonomous regions, province-level municipalities, and cities with independent planning status under the national social and economic development plan (计划单列市), the Finance Bureau of the Xinjiang Production and Construction Corps, the Guangdong Branch of the General Administration of Customs and all customs administrations directly subordinate [to the General Administration of Customs], the State Administration of Taxation tax bureaus of all provinces, autonomous regions, province-level municipalities, and cities with independent planning status under the national social and economic development plan, the local supervision bureaus of the Ministry of Finance, and the field offices of the State Administration of Taxation in various regions:
I. Import duties (进口关税) are waived in the following situations:
(1) The import of raw materials, consumables, special construction materials for clean rooms, supporting systems, and spare parts for integrated circuit production equipment (for both imported equipment and Chinese-made equipment) for self-use in production (here and below understood to include use in research, development, and applications) that cannot be produced in China or whose performance cannot meet requirements by logic circuit and memory manufacturers with integrated circuit line widths less than or equal to 65 nm and integrated circuit manufacturers with characteristic processes for lines with widths of less than 0.25 microns (such processes may include analog, digital-analog hybrid, high voltage, radio frequency [RF], power, optoelectronic integration, image sensing, microelectromechanical systems [MEMS], and silicon-on-insulator [SOI] processing.)
(2) The import of raw materials and consumables for self-use in production, that cannot be produced in China or whose performance cannot meet requirements, by compound integrated circuit manufacturers with integrated circuit line widths of less than 0.5 microns and advanced packaging and testing companies.
(3) The import of raw materials and consumables for self-use in production, that cannot be produced in China or whose performance cannot meet requirements, by manufacturers of key raw materials and parts for the integrated circuit industry (namely, target materials, photoresists, masks, packaging substrates, polishing pads, polishing fluids, silicon single crystals of 8 inches and above, and silicon wafers of 8 inches and above).
(4) The import of clean room special building materials, supporting systems, and spare parts for production equipment (including imported equipment and domestic equipment), that cannot be produced in China or whose performance cannot meet requirements, by manufacturers of photoresists, masks, and silicon wafers of 8 inches and above that are used in integrated circuits.(5) The import of self-use equipment and the technology (including software), accessories, and spare parts imported together with the equipment in accordance with a contract by state-supported key integrated circuit design enterprises and software enterprises as well as enterprises (integrated circuit manufacturers and advanced packaging and testing enterprises) that comply with items (1) and (2) of this article. However, this does not apply to the products listed in the Catalog of Imported Commodities Not Exempt from Import Duties for Domestic Investment Projects, the Catalog of Imported Commodities Not Exempt from Import Duties for Foreign-Funded Investment Projects, and the Catalog of Key Technological Equipment and Products Not Exempted from Import Duties. When the above-mentioned imported goods do not count toward the total investment, the relevant projects do not need to issue project confirmation letters (项目确认书).