U.S. Files WTO Proceedings against China over Aircraft Taxes | Aviation International News

U.S. Files WTO Proceedings against China over Aircraft Taxes

Cites failure to disclose VAT exemption for Chinese aircraft manufacturers

Comac recently delivered the first production ARJ-21 regional jet to Chengdu Airlines.

By Gregory Polek • Senior Editor

December 9, 2015

The office of the U.S. Trade Representative (USTR) has launched dispute settlement proceedings at the World Trade Organization over China’s exemption of value added tax (VAT) on domestically made commercial jets weighing less than 25 metric tons, including the new Comac ARJ-21, U.S. Trade Representative Michael Froman announced Tuesday. The U.S. claims that China’s 17 percent VAT on imported aircraft in that weight category constitutes a breach of WTO rules against taxation on the basis of national origin and that China’s failure to publish measures to exempt its own manufacturers from the tax violates transparency commitments the country made when it joined the WTO.

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