Trade Sanctions Threatened Against U.S.

The European Union has rejected a U.S. plan to create tax breaks for U.S. exports, stating that the plan violates World Trade Organization rules. The WTO has threatened sanctions and tariffs if the U.S. doesn’t come up with a viable alternative to the offshore tax havens now available to U.S. companies.

Presently, under the auspices of the Foreign Sales Corporation program, many U.S. corporations, from small businesses to the likes of Microsoft, Boeing, General Motors, and United Technologies, funnel exports through offshore tax havens such as Bahamas and the Virgin Islands in order to save 15% on income taxes. This program was originally developed to level the playing field with European exporters who are given a rebate in their own country when selling overseas.

A new U.S. plan, which would provide tax breaks to companies exporting goods, has been described by the EU as improperly subsidizing the companies. The U.S. feels the plan is compliant with World Trade Organization specifications, and plans to press ahead, hoping that Congress will ratify the the plan by the October 1st deadline.

The proposed plan would cost U.S. taxpayers some $300 million annually as corporate costs are passed on to consumers. The U.S. has until October 1 to arrive at a plan that is acceptable to the EU and that meets the World Trade Organization guidelines or else face possible sanctions on many exported goods.

You may like these other stories...

By Jason Bramwell, Staff Writer CPAs in New Jersey, New York, and Pennsylvania believe economic conditions in the United States will likely be the same one year from now, and while they predict higher business revenues...
By Jason Bramwell Managers in accounting, finance, and IT are cautiously optimistic about their hiring plans for the fourth quarter of 2013, according to a new hiring outlook survey from staffing firm Brilliant. ...
By Jason Bramwell CPA firms in 2012 posted their first respectable increases in revenues since before the start of the recession; however, professional staff turnover last year rose approximately 50 percent across the...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.