SIA praises US-China accord on value added tax

China had been imposing a value added tax of 17 percent on sales of all imported and domestically produced semiconductors, but rebating tax with the exception of 3 percent for semiconductors produced in China. The SIA had made several calls for China to remove the discriminatory element within its tax structure, most recently in May

China is now set to realign its VAT so that all semiconductor products are taxed at 17 percent regardless of origin, the SIA said. The settlement agreement is due to filed with the World Trade Organization in Geneva next week, the trade group added.

"We are very pleased with China's agreement to eliminate the provisions of its value added tax regime that discriminate against imported semiconductors," said SIA President. "

"We would like to extend our appreciation to the representatives of both the United States and China for their outstanding efforts to bring this dispute to a prompt and mutually beneficial resolution," said George Scalise, president of the SIA in a statement. "Elimination of the discriminatory features of China's VAT regime will assure a level playing field for all competitors. The SIA extends its special appreciation to United States Trade Representative Robert Zoellick and his colleagues at USTR and the Department of Commerce, who made this case a top priority."