Monday, November 3, 2003
The Semiconductor Industry Association Wednesday released a report which again charged that the Value-Added Tax (VAT) China imposes on chip imports is a discriminatory trade barrier in violation of World Trade Organization rules.
The SIA for some time has been seeking to have the VAT for imported semiconductors eliminated. The trade group said semiconductors designed or produced in China qualify for a VAT rebate in excess of 3%, causing imported chips to face a large penalty in the local market.
The SIA report, titled "China's Emerging Semiconductor Industry -- The Impact of China's Preferential Value-Added Tax on Current Investment Trends," claimed China's VAT policy puts pressure on foreign chipmakers to design and produce chips in that country or face a cost penalty.
China agreed to eliminate its import tariffs on semiconductors as part of the reforms implemented when the country joined WTO in 2001. But SIA charged that the remaining VAT levied on imported chips is just as big a trade barrier as the eliminated tariffs. "The WTO does not allow countries to eliminate tariffs on the one hand, and arbitrarily impose a tax applied disproportionately on the other," the report asserted.
By: DocMemory
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