The EU filed a formal WTO complaint against Brazil in late December, targeting a series of tax measures that it claims provide unfair advantages to the South American country’s manufacturing sector.
In the request for consultations (DS472) - the first stage of WTO dispute settlement proceedings - the EU highlighted a series of tax measures and charges that Brazil has imposed in the automotive sector over the past two years.
This began in September 2011 with a 30 percent tax increase on motor vehicles, with an exemption for domestically produced cars and trucks. This was then followed by a new tax regime called “Innovar Auto,” launched in 2012 and set to expire in 2017. The EU also flagged tax measures affecting the electronics and technology industry, along with goods produced in Free Trade Zones, and tax advantages that Brasilia provides for exporters.
Brussels claims that these measures impose a higher tax burden on imported goods than on their domestic equivalents, while conditioning tax advantages to the use of locally produced goods. These policies have, the EU says, harmed their exporters while providing Brazilian producers with unfair advantages.
For their part, Brazilian officials say that their policies are in line with WTO obligations, with Foreign Minister Luiz Alberto Figueiredo insisting that his government has “solid arguments” in its favour.
In the request for consultations (DS472) - the first stage of WTO dispute settlement proceedings - the EU highlighted a series of tax measures and charges that Brazil has imposed in the automotive sector over the past two years.
This began in September 2011 with a 30 percent tax increase on motor vehicles, with an exemption for domestically produced cars and trucks. This was then followed by a new tax regime called “Innovar Auto,” launched in 2012 and set to expire in 2017. The EU also flagged tax measures affecting the electronics and technology industry, along with goods produced in Free Trade Zones, and tax advantages that Brasilia provides for exporters.
Brussels claims that these measures impose a higher tax burden on imported goods than on their domestic equivalents, while conditioning tax advantages to the use of locally produced goods. These policies have, the EU says, harmed their exporters while providing Brazilian producers with unfair advantages.
For their part, Brazilian officials say that their policies are in line with WTO obligations, with Foreign Minister Luiz Alberto Figueiredo insisting that his government has “solid arguments” in its favour.
The
EU filed a formal WTO complaint against Brazil in late December,
targeting a series of tax measures that it claims provide unfair
advantages to the South American country’s manufacturing sector. - See
more at:
http://ictsd.org/i/news/bridgesweekly/182324/#sthash.zYUxn8fL.dpuf
Read more: ICTSD • EU Takes Aim at Brazilian “Tax Advantages” in WTO Dispute
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