In a statement filed in the U.S. Federal Register, SIA said the World Trade Organization (WTO) is almost certain to find that China's VAT regime violates WTO rules. China presently imposes a value-added tax of 17 percent on sales of all imported and domestically produced semiconductors, but rebates the amount of the VAT burden in excess of 3 percent for semiconductors produced in China.

SIA said it has no objection to a legitimate tax with the sole purpose is generating revenue rather than limiting sales of imported products.

"China has made a good-faith effort in a number of policy areas to bring its laws and regulations into WTO compliance," said SIA President George Scalise. "The discriminatory tax on imported semiconductors remains in effect. The multilateral consultations with other interested parties offer an excellent opportunity for China to take early action to eliminate the discrimination on imported semiconductor products as required by WTO rules."

By: DocMemory
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