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U.S. Files WTO Complaint on Chinese Tax Exemptions for Domestically-Made Aircraft

Thursday, December 10, 2015
Sandler, Travis & Rosenberg Trade Report

According to a press release from the Office of the U.S. Trade Representative, the U.S. has requested consultations with China at the World Trade Organization concerning tax exemptions that result in “substantial discrimination” against imported aircraft. Specifically, USTR states, China imposes a 17 percent value-added tax on imported aircraft – generally those under 25 metric tons by weight, including general aviation, regional and agricultural aircraft – while exempting from VAT such aircraft made in China.

The U.S. alleges that these measures breach WTO rules prohibiting discriminatory taxation on the basis of national origin. The U.S. is also accusing China of trying to hide these tax exemptions by failing to publish them in violation of the transparency commitments China made when it joined the WTO.

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