The Influence of Import Tax-reduction Policy of Machine Tool Equipment on China's Machine Tool Industry

China has a large number of hardware tools companies, large clusters, and strong dependence on exports. In recent years, from the perspective of the exhibitors who have signed up for the machine tool show, China's tool industry has already felt a burst of chill. Affected by the cold crisis of the financial crisis, the profit of machine tool export has dropped significantly. According to the China Machine Tool Network (Machine35), the reason why companies exhibit their enthusiasm is because they need to seek a kind of communication and promotion under internal and external problems.

A person in charge of machine tool exhibitors believes that cost pressures, rising product prices and other factors will have an impact on exports.

When the economic environment is no longer expected to pick up in the short term, the state’s control policy has become a life-saving straw. According to the relevant national regulations, the tax exemption policy for imported machine tools was adjusted for foreign-funded enterprises: The tax incentives for foreign-invested companies to import self-use machine tools and pressure-forming machines commenced on November 1, 2008 and ceased to be implemented. This means that foreign companies that import these equipment will not be able to enjoy the benefits of exemption from customs duties and value added tax as they have in the past.

After the adjustment of policies, newly approved foreign-funded projects will be subject to tariffs if they import CNC machine tools and pressure forming machines listed in the Catalogue of Non-Exempted Domestic-funded Enterprises. In other words, foreign-funded enterprises can only enjoy the relevant benefits by importing CNC machine tools and pressure forming machines that cannot meet the requirements of the existing domestic technologies. Prior to this, foreign-invested enterprises' projects in the total investment, imported CNC machine tools and pressure forming machines will be exempted from import duties.