Export Tax Benefits and the WTO: Foreign Sales Corporations and the Extraterritorial Replacement Provisions

Brumbaugh, David L.

Library of Congress. Congressional Research Service.

关键词: Trade;    Tax exemption;    Trade agreements;    Taxation;    International affairs;   

RP-ID  :  RS20746
RP-ID  :  RS20746 2003-09-25

美国|英语

来源: UNT Digital Library

【 摘 要 】

The U.S. tax code’s Foreign Sales Corporation (FSC) provisions provided a tax benefit for U.S. exporters. However, the European Union (EU) in 1997 charged that the provision was an export subsidy and thus contravened the World Trade Organization (WTO) agreements. A WTO ruling upheld the EU complaint, and to avoid WTO sanctioned retaliatory tariffs, U.S. legislation in November 2000 replaced FSC with the “extraterritorial income” (ETI) provisions, consisting of a redesigned export tax benefit of the same magnitude as FSC. The EU maintained that the new provisions are also not WTO-compliant and asked the WTO to rule on the matter.