Global Trade Alert

On 10 March 2014, the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation jointly issued the Amendment on the "Notice concerning the Taxation on Aircraft Equipment Imported for Maintenance Purposes by Domestic Airline Companies Operating Regional Routes" (Caiguanshui '2014' No.7).
 
According to this amendment, operators connecting with Tibet and other designated policy routes to Beijing, Shanghai and Guangzhou were added to the category of "regional routes" which qualify for import duty and VAT exemptions for aircraft parts used in the maintanience of aircraft used on those routes. The benefit was granted retroactively and extends back to 1 January 2013.
 
The regional Chinese air transport market is closed to foreign companies. Hence, the stated measure does not constitute a discrimination against foreign competitors for domestic cargo or passenger flights. To reflect the import tariff reduction, it is coded liberalizing.