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...

For the first time since 2006, more than 50 percent of CFOs believe the US economy will show signs of improvement over a six-month span rather than remain the same or worsen, according to a new study from Chicago-based...
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. ...

Upcoming CPE Webinars

Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.