Customs & Trade Alert

Ernst & Young --- China's automotive industry is in a constant state of change, including the rules issued by the Chinese Government to regulate the industry. Decree No. 125 is the latest in this series of regulatory reforms. Based on the letter of the law, the Decree has the potential to revolutionize the way auto manufacturers operate in China and could significantly increase the amount of taxes assessed on imported components.

In China, the duty rate for imported automotive products constituting the essential character of a "Complete Vehicle" is significantly higher than the component rate.

Main contents:

·Sea of Change to Hit Auto Companies in China

·Decree No.125 – Importation of Components Constituting a Complete Vehicle

·Practical Implications