Research On Tax Risks Of Chery Automobile's Investment In Brazil

Global economic growth in 2018 was characterized by strong growth and wide scope,relative to the virtual economy,governments are paying more attention to the real economy.China is actively implementing the "going out" policy In 2018,China's total outbound direct investment totaled us $129.83 billion,up 4.2% year on year.The government has put forward "Made in China 2025" strategy,that is,based on the actual economic development of our country,to help China's manufacturing industry to rapidly upgrade and transform to meet the new challenges of globalization.Located in South America,with a large iron ore reserve,a well-developed industrial infrastructure and a huge consumer market potential,Brazil has the largest economy in Latin America,and its economic structure is relatively close to that of the developed countries Is One of the investment objectives chosen by international investors.However,the Brazilian government,in order to build its own auto industry system and develop its own independent auto brands,decided to impose high tariffs and industrial product taxes on imported cars,which greatly reduced the profit space of auto companies.To maintain sales in Brazil,multinational auto companies had set up car factories in Brazil to reduce the tax burden,Chery automobile was no exception.The decision was made in 2010 to build the factory in Brazil,which was Chery's largest overseas-owned factory in Brazil and was inaugurated in 2014 at a total investment of US $400 million In 2017,Chery built a second assembly plant in the city of Annapolis,Goiás,together with Caoa,Brazil's largest carmaker and distributor.However,the Brazilian tax policy and tax system is quite different from our tax system,and there are many kinds of taxes.Tax Planning is an essential part of Chery's investment in Brazil,as it seeks to reduce corporate tax burdens and avoid tax risks to help the company go global and increase profitability in Brazil.Chery Automobile,as a Chinese self-owned brand automobile company,cannot resolve the Brazilian automobile market in solving the proposition of how to expand its share in the global automobile market.This article will combine the Brazilian tax system and the tax case of investing in the construction of a car factory in Brazil topoint out the potential tax risks of Chery Automobile.The long-term sustainable development provides some reference suggestions.