Four departments issued an article! Non-monetary asset exchange corporate income tax policies relating to integrated circuit companies and industrial parent machine companies

The Zhitong Finance App learned that on August 14, the Ministry of Finance, the State Administration of Taxation, the National Development and Reform Commission, and the Ministry of Industry and Information Technology issued a notice on corporate income tax policies for non-monetary asset exchange for integrated circuit companies and industrial machinery companies. Effective from January 1, 2026 to December 31, 2028. The “Notice” mentions that integrated circuit companies and industrial parent machine companies exchanged non-monetary assets between January 1, 2026 and December 31, 2028. Non-monetary asset exchange income confirmed according to regulations can be evenly included in the taxable income for the corresponding year in installments within a period of no more than 5 years and calculated and paid corporate income tax according to current policy provisions; losses caused by enterprises carrying out non-monetary asset exchanges cannot be confirmed in installments.

The original text is as follows:

Notice on non-monetary asset exchange corporate income tax policies for integrated circuit companies and industrial parent machine companies

Ministry of Finance, State Administration of Taxation, National Development and Reform Commission, Ministry of Industry and Information Technology Notice No. 23 2026

The corporate income tax policy announcement on non-monetary asset exchange for integrated circuit companies and industrial parent machine companies is as follows:

1. Non-monetary asset exchanges between integrated circuit companies and industrial parent machine companies occurred during the period from January 1, 2026 to December 31, 2028. Non-monetary asset exchange income confirmed according to regulations can be evenly included in the taxable income for the corresponding year in installments within a period of no more than 5 years, and corporate income tax is calculated and paid according to current policy provisions; losses incurred by enterprises engaging in non-monetary asset exchanges cannot be confirmed in installments.

2. Enterprises exchanging non-monetary assets with integrated circuit companies and industrial parent machine companies shall confirm the non-monetary asset exchange proceeds in accordance with current policy provisions and pay taxes according to law. If both companies that have exchanged non-monetary assets are integrated circuit companies or industrial parent machine companies, both parties can enjoy the preferential tax policies stipulated in this notice.

3. Both parties to an enterprise exchanging non-monetary assets shall use the fair value of the non-monetary asset exchange corresponding to the non-monetary asset exchange, deducting the corresponding balance after exchanging the non-monetary asset tax base and related taxes, and calculate and confirm the income from the non-monetary asset exchange.

4. Non-monetary assets obtained by both parties in the exchange of non-monetary assets are taxed based on the fair value of the asset and the relevant taxes paid.

5. Non-monetary assets referred to in this announcement refer to assets other than monetary assets such as cash, deposits, accounts receivable, notes receivable, and bond investments ready to be held until maturity. The exchange of non-monetary assets referred to in this announcement means that an enterprise exchanges non-monetary assets for non-monetary assets.

Where a transaction involves non-monetary assets and monetary assets at the same time, the portion of non-monetary assets exchanged for non-monetary assets may be subject to the instalment tax policy in accordance with the provisions of this Notice; the portion of exchanging non-monetary assets into monetary assets is a transaction where consideration in the form of currency is obtained. The corresponding income or loss shall be confirmed in accordance with current regulations, and shall not enjoy the installment tax policy. If both parties to the transaction involve monetary assets, the difference between the exchange of monetary assets is the difference between monetary assets.

6. Where an integrated circuit enterprise or industrial parent machine enterprise exchanges non-monetary assets and transfers assets obtained within 5 years, they shall stop implementing the installment tax policy and exchange income for non-monetary assets that have not been confirmed during the installment tax period. When the annual corporate income tax accounts for the year in which the assets were transferred are settled, corporate income tax shall be calculated and paid in one time.

If an integrated circuit company or industrial parent machine enterprise is cancelled within 5 years of non-monetary asset exchange, it shall stop implementing the instalment tax policy and calculate and pay corporate income tax in a lump sum for non-monetary asset exchange income that has not been confirmed during the installment tax period when the annual corporate income tax accounts for the year of cancellation are settled.

7. Integrated circuit companies and industrial parent machine enterprises referred to in this notice refer to enterprises that meet the requirements of the “Notice of the Ministry of Finance, the State Administration of Taxation, and the Ministry of Industry and Information Technology on Increasing the Additional Deduction Ratio for R&D Expenses of Integrated Circuit and Industrial Mother Engine Enterprises” (Ministry of Finance, State Administration of Taxation, National Development and Reform Commission, Ministry of Industry and Information Technology Notice No. 44 of 2023, hereinafter referred to as Notice No. 44). If there are any updates, from its regulations.

Integrated circuit enterprises and industrial parent machine enterprises that use list management in accordance with Notice No. 44 shall be provided by the National Development and Reform Commission and the Ministry of Industry and Information Technology to the Ministry of Finance and the State Administration of Taxation with a list of enterprises that can enjoy preferential treatment in the previous year before the end of March of each year; if they do not use list management, the tax authorities may refer them to the development, reform, industry, and information technology departments for verification in accordance with regulations.

8. Corporate income tax involving non-monetary asset investment by enterprises continues to be implemented in accordance with the “Notice of the Ministry of Finance and the State Administration of Taxation on Corporate Income Tax Policy Issues for Non-monetary Asset Investment” (Finance and Taxation (2014) No. 116) and the “Notice of the Ministry of Finance and the State Administration of Taxation on Improving Income Tax Policies Related to Equity Incentives and Technology Investment” (Finance and Taxation (2016) No. 101).

9. If an enterprise exchanges non-monetary assets and meets the relevant tax policy conditions stipulated in documents such as the “Notice of the Ministry of Finance and the State Administration of Taxation on Certain Issues Concerning the Handling of Corporate Income Tax in Enterprise Restructuring Operations” (Finance and Taxation (2009) No. 59), the “Notice of the Ministry of Finance and the State Administration of Taxation on Corporate Income Tax Handling Issues Related to Enterprise Reorganization” (Finance and Taxation (2014) No. 109), etc., the enterprise may choose to implement it in accordance with one of the policy provisions, and once chosen, it cannot be changed.

10. This announcement is effective from January 1, 2026 to December 31, 2028. If an enterprise has enjoyed the installment tax policy stipulated in this notice for less than 5 years on December 31, 2028, it can continue to enjoy it until the end of 5 years.

We hereby announce it.

This article was selected from the “Ministry of Finance” official website, Zhitong Finance Editor: Jiang Yuanhua.