Information date: 5 November 2026 — The IC production incentive runs on three node bands: below 28nm with an operating period of 15 years or more gives a ten-year corporate income tax exemption; below 65nm with 15 years gives five years exempt plus five at half rate; below 130nm with 10 years gives two years exempt plus three at half rate, counted from the first profit-making year. If the certified node is comfortably inside a band, claim from the first profit-making year and keep the test report, list notice and R&D documentation in a single audit file. If the node sits at a boundary, obtain the third-party test before the annual list cycle rather than after a tax inquiry, and model the exemption as a deferral of cash tax, not a permanent reduction.
Verified facts and scope
The IC production incentive runs on three node bands: below 28nm with an operating period of 15 years or more gives a ten-year corporate income tax exemption; below 65nm with 15 years gives five years exempt plus five at half rate; below 130nm with 10 years gives two years exempt plus three at half rate, counted from the first profit-making year.
Scope has to be fixed before the numbers mean anything: Covers wafer fabrication enterprises and discrete IC production projects, including foreign-invested fabs. Confirm before filing: which node band the certified process actually meets, whether the entity or the project is the claim unit, the first profit-making year, and whether wafer-thinning, packaging and testing revenue sits inside or outside the eligible scope. Anything outside that set is a separate question with its own evidence requirement, and mixing the two is the most common way a workable plan turns into an unusable one.
For a decision on “Review: China’s Integrated-Circuit Production Tax Holiday in Practice — the 28nm/65nm/130nm Node Tests, the Ten-Year Exemption and the Certification File a Foreign-Invested Fab Submits”, keep three layers apart: the published rule or statistic, the company’s own orders and process records, and the assumptions nobody has tested yet. The first layer defines the external conditions, the second proves what is true for this business, and the third is where the risk actually sits. Public material cannot substitute for a contract, a system log, a sample or a live test.
A practical way to test the scope is to ask which parts of “Review: China’s Integrated-Circuit Production Tax Holiday in Practice — the 28nm/65nm/130nm Node Tests, the Ten-Year Exemption and the Certification File a Foreign-Invested Fab Submits” would still be true if the company changed supplier, entity or product line tomorrow. Items that survive that change belong to the rule layer and can be taken from official publications; items that do not survive belong to the operating layer and have to be rebuilt from invoices, warehouse records, customs entries or platform statements. Where Covers wafer fabrication enterprises and discrete IC production projects, including foreign-invested fabs. Confirm before filing: which node band the certified process actually meets, whether the entity or the project is the claim unit, the first profit-making year, and whether wafer-thinning, packaging and testing revenue sits inside or outside the eligible scope, the two layers are frequently mistaken for each other, and an action plan built on the wrong one either over-complies or misses a deadline it never saw coming.
How the effect reaches operations
Entitlement is administered through an annual list jointly compiled by the economic planning, industry, finance and tax authorities, not through a self-assessed return. The node is evidenced by a third-party test report on line width, so process upgrades, capacity expansion and mergers can move a fab between bands and restart or break the exemption clock.
The standard errors are dating the exemption from the first year of revenue rather than the first profit-making year, claiming on a partially qualified line, and assuming a self-declared node survives audit. Loss of list status in a later year can trigger retroactive adjustment with late-payment surcharges, and restructurings can invalidate an existing claim.
Translated into an operating sequence, Entitlement is administered through an annual list jointly compiled by the economic planning, industry, finance and tax authorities, not through a self-assessed return. The node is evidenced by a third-party test report on line width, so process upgrades, capacity expansion and mergers can move a fab between bands and restart or break the exemption clock. That ordering matters: check applicability first, then the transmission step, and only then the size of the gap in cost or timing. When an intermediate step cannot be confirmed, the honest response is to narrow the scope of the conclusion rather than to substitute an industry average for the company’s own figures.
The cost of getting the order wrong is asymmetric. A team that checks applicability too late usually discovers it at the point where the shipment, the filing or the invoice can no longer be changed without penalty, and by then the only remaining lever is price. A team that checks early spends a few hours on questions that turn out to be irrelevant, which is cheap by comparison. On “Review: China’s Integrated-Circuit Production Tax Holiday in Practice — the 28nm/65nm/130nm Node Tests, the Ten-Year Exemption and the Certification File a Foreign-Invested Fab Submits” the practical rule is therefore to spend the first hour on scope and the second on the numbers, never the other way round.
Decision
If the certified node is comfortably inside a band, claim from the first profit-making year and keep the test report, list notice and R&D documentation in a single audit file. If the node sits at a boundary, obtain the third-party test before the annual list cycle rather than after a tax inquiry, and model the exemption as a deferral of cash tax, not a permanent reduction.
The conditions should be written down so the decision can be re-run by someone else: Covers wafer fabrication enterprises and discrete IC production projects, including foreign-invested fabs. Confirm before filing: which node band the certified process actually meets, whether the entity or the project is the claim unit, the first profit-making year, and whether wafer-thinning, packaging and testing revenue sits inside or outside the eligible scope. When those hold, proceed as described; when one is missing, close the gap first and decide afterwards. Regulatory and tax-mechanics summary only; not a tax opinion, and no assurance that a specific fab’s process, list status or filing will be accepted by the competent authorities.
Two workstreams usually have to move in parallel. The compliance workstream closes the document side of “Review: China’s Integrated-Circuit Production Tax Holiday in Practice — the 28nm/65nm/130nm Node Tests, the Ten-Year Exemption and the Certification File a Foreign-Invested Fab Submits” — registrations, confirmations, filings — while the commercial workstream protects the delivery date, the pricing already quoted and the customer commitments that were made on the earlier reading of the rules. Running them as one queue is how small documentation gaps become missed shipment dates: the commercial side waits for a certificate that could have been requested a week earlier. If the certified node is comfortably inside a band, claim from the first profit-making year and keep the test report, list notice and R&D documentation in a single audit file. If the node sits at a boundary, obtain the third-party test before the annual list cycle rather than after a tax inquiry, and model the exemption as a deferral of cash tax, not a permanent reduction. Set one owner per workstream and one shared status sheet, and treat a red item on either side as a reason to freeze only the affected order.
Implementation checklist
- Fix the first profit-making year in writing before claiming.
- Commission a third-party line-width test report early.
- Track the annual list notice and retain it in the tax file.
- Name one decision owner, one execution owner and one review date.
- Keep the source page, access date, entity and internal evidence.
- On any change, reopen only the affected judgement.
Evidence and review
Start with the smallest test that can change the answer: Fix the first profit-making year in writing before claiming. Pick one real entity or one representative case, write down the continue, watch and stop conditions in advance, and record the input version, the owner, the start time and the actual result. The first pass should only look at facts that move the decision; formatting preferences are not risk.
The second pass is completed by “Commission a third-party line-width test report early”, and someone who did not prepare the file should spot-check one piece of critical evidence. The standard errors are dating the exemption from the first year of revenue rather than the first profit-making year, claiming on a partially qualified line, and assuming a self-declared node survives audit. Loss of list status in a later year can trigger retroactive adjustment with late-payment surcharges, and restructurings can invalidate an existing claim. A single small deviation can be corrected in place; a repeated deviation, or one that touches a statutory duty or changes the economics, is what justifies pausing the affected part.
After “Track the annual list notice and retain it in the tax file”, compare the actual result with the baseline rather than with the impression of the team. If the certified node is comfortably inside a band, claim from the first profit-making year and keep the test report, list notice and R&D documentation in a single audit file. If the node sits at a boundary, obtain the third-party test before the annual list cycle rather than after a tax inquiry, and model the exemption as a deferral of cash tax, not a permanent reduction. When the arrangement is extended to more products, customers or processes, keep the same success test and one complete record per batch. If later information changes, update only the affected fields.
One last discipline keeps the file usable next quarter: write the closing note as if a colleague who has never spoken to the supplier has to act on it. That note states what was verified, on which date, against which source, and what remains open — on “Review: China’s Integrated-Circuit Production Tax Holiday in Practice — the 28nm/65nm/130nm Node Tests, the Ten-Year Exemption and the Certification File a Foreign-Invested Fab Submits” it also states which of the three actions was actually finished and which was only scheduled. Teams that skip the closing note re-litigate the same question every month, and each round costs more than the documentation would have. Regulatory and tax-mechanics summary only; not a tax opinion, and no assurance that a specific fab’s process, list status or filing will be accepted by the competent authorities.
Limits of the conclusion
Regulatory and tax-mechanics summary only; not a tax opinion, and no assurance that a specific fab’s process, list status or filing will be accepted by the competent authorities.
The limits are structural rather than cautious wording. Public sources describe rules and market conditions; they do not observe “Review: China’s Integrated-Circuit Production Tax Holiday in Practice — the 28nm/65nm/130nm Node Tests, the Ten-Year Exemption and the Certification File a Foreign-Invested Fab Submits” inside a specific company. Where the analysis quotes a second-hand interpretation, the original release has to remain reachable, and a figure that cannot be traced back does not enter the decision table. Where the point depends on Covers wafer fabrication enterprises and discrete IC production projects, including foreign-invested fabs. Confirm before filing: which node band the certified process actually meets, whether the entity or the project is the claim unit, the first profit-making year, and whether wafer-thinning, packaging and testing revenue sits inside or outside the eligible scope, the conclusion is only as current as the last check of those conditions.
