Tax row could see Embraer stop production in Harbin

摘要

Brazil's Embraer has cast doubt on the future of its Chinese business jet assembly line, warning that unless it can strike a deal with Beijing over a tax row, it could cease production at the Harbin facility. Embraer's grievance centres on import duties averaging 3% on components and 17% value added tax. "There's a 20% cost that makes production costs higher than our Brazilian line. It's a big challenge," says Embraer China president Guan Dongyuan. Harbin Embraer Aircraft Industry - a joint venture between Embraer and AVIC set up in 2003 -formerly assembled the ERJ-145 regional jet switching in 2012 to production of the ERJ-based Legacy 650 business aircraft. The airframer had wanted to make the larger E-190 regional jet in China, but the authorities did not approve the switch; a decision likely to have been coloured by the nation's efforts to develop its own indigenous regional type, Comac's ARJ21.