Feeds

China agrees to drop chip tax rebates

WTO intervention avoided

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

China has bowed to US pressure and agreed to remove a semiconductor sales tax regime said to favour local chip makers over their foreign rivals.

Today, China imposes a 17 per cent tax on the sale of all semiconductor products. However, domestic vendors are able to request an 11 per cent rebate, rising to 14 per cent if the products were also developed locally.

That, says overseas chip makers, amounts to discrimination and as such runs contrary to World Trade Organisation (WTO) rules - even though China didn't join the WTO until December 2001, long after the rebate regime had been put in place. Even so, in March this year, the US submitted a complaint to the WTO, which put in place a period of negotiation, the results of which were announced today. The US complaint was backed by Europe and Japan/

China will end the rebate, but the 17 per cent sales tax will remain, to be applied to all chips sold, irrespective of their country of origin. The country's agreement to drop the rebate, which it claims it had put in place to aid its fledgling chip industry, will be filed with the WTO next week.

The Semiconductor Industry Association (SIA), the US chip makers' club, welcomed China's move, which it said "will assure a level playing field for all competitors", and the country's "continued efforts to bring its trade laws and regulations into compliance with WTO rules".

The concession announced today marks the second time China has bowed to overseas pressure over rules imposed on overseas technology companies. In April, it agreed to drop a requirement that all wireless networking products sold in China support its Wireless Authentication and Privacy Infrastructure (WAPI) specification. Until it agreed to do so, Intel for one had said it would not ship its wirless products in China.

The SIA calculates that China is already the third-largest country market for semiconductors and is projected to become the second-largest country market before 2010. ®

Related stories

Japan fires shot at Chinese chip tax
Europe backs US protest over China chip tax
China agrees to US chip tax talks
US asks WTO to rule on China's chip tax
US tells China to drop chip sales tax - or else
US chip industry to take on Beijing
SIA calls on China to dismantle chip VAT rules
China agrees to drop WAPI wireless sec spec
US chip biz tells China to ditch local WLAN standard

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
BIG FAT Lies: Porky Pies about obesity
What really shortens lives? Reading this sort of crap in the papers
Be real, Apple: In-app goodie grab games AREN'T FREE – EU
Cupertino stands down after Euro legal threats
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
The Heartbleed Bug: how to protect your business with Symantec
What happens when the next Heartbleed (or worse) comes along, and what can you do to weather another chapter in an all-too-familiar string of debilitating attacks?