The Governments of France and the United States are reportedly close to settling a dispute surrounding France’s digital services tax.
The US President had said that he intended to announce new tariffs on imports of French wine in response to the newly introduced French DST, which the US Government argued unfairly discriminates against US companies.
The French DST imposes a three percent tax rate on the revenue of digital companies providing advertising services, selling user data for advertising purposes, or performing intermediation services. Companies with global revenues of EUR750m (USD835m) or more and French sales of at least EUR25m are required to pay the tax.
The tax, approved by the French Parliament on July 11, 2019, will to apply to turnover realized in France since January 1, 2019, and is expected to affect around 30 companies supplying digital services in France.
The Office of … Read More »
As far as taxation goes, preparation and planning have long been integral to a successful business or investment strategy, no more so than in today’s post-BEPS, uber transparent world. The tax headlines are littered with seemingly well-prepared companies with well-staffed tax departments, embroiled in long, expensive disputes with the tax authorities. So woe betide any taxpayer who jumps into the world of international trade and commerce without having given thought to the tax consequences.
However, sometimes taxpayers can find themselves in an impossible position, planning for outcomes that are unknown. In Europe, both the United Kingdom and the European Union have been urging businesses to prepare for the possibility of a no-deal Brexit. Which must be a bit like asking them to plot a course on a map which has had all the names of the roads, towns, and cities deleted. … Read More »
Europe and the United States aren’t just separated physically by 3,000 miles of ocean. Often, the divides are economic, political, social, and cultural. Put it this way, Paris, France, is a very different place to Paris, Texas.
There is also a widening gap to be bridged between these two economic superpowers on trade matters. Indeed, it is striking how the US’s and the EU’s trade policies are moving in different directions. President Trump’s first act was to pull the US out of the Trans-Pacific Partnership. He has also shown his disliking for the existing NATFA text. Meanwhile, the EU is negotiating and signing free trade agreements like they’re going out of fashion.
Given rising concerns about a looming trade war (perhaps it has already begun?), the signing of an FTA between the EU and Japan flew in under the radar somewhat last week, even … Read More »
Free zones are presently all the rage (including in South Africa). So much so that Poland has decided to go the whole hog and transform itself into one big, country-sized special economic zone.
The fact that the world seems to have lost count of the number of its free zones tells you something about the rate at which they have proliferated in the post-World War Two era, and particularly in the last couple of decades. According to the World Freezone Atlas published in 2010, there were 1,735 free zones, dotted all over the globe. However, an OECD study published two years previously suggested that there were as many as 5,000 free zones. Perhaps the true figure is somewhere in the middle – something like 3,500 perhaps, as the World Trade Organization suggests.
The actual answer, I think, depends very much on your definition … Read More »
Importers of solar panel equipment in India are probably feeling very aggrieved at their Government at the moment, after it announced a proposal to slap a 70 percent tariff on such products sourced from China.
India may well be justified in pursuing this somewhat drastic measure. After all, it wouldn’t be the first time that China has been accused of selling its products around the world too cheaply to the detriment of local producers (local consumers, who of course benefit from low prices, never seem to count!). But trade disputes are rarely clear cut, and it seems that few parties ever come out of them completely undamaged. So it might not be India’s smartest move.
Furthermore, this story was notable because it adds to a growing trend for governments to tax the production and consumption of renewable energy, surely a policy completely at odds … Read More »
In what can also be described as something of a breakthrough for Africa’s future economic prospects, ministers agreed on December 2 – possibly around the same time as the US Senate was burning the midnight oil over tax reform – to form the Continental Free Trade Area (CFTA).
The CFTA is being touted as a massive opportunity for Africa. One of the main reasons cited for the region’s slow pace of economic development isn’t so much it’s lack of trade with the rest of the world, but its well-known inability to trade with itself. As Marc Yombouno, Minister of Trade of the Republic of Guinea, observed at the end of the talks in Niamey, Niger, intra-African trade represents only about 16 percent of the continent’s total trade, whilst in Asia and Europe, intra-regional trade is more like 50 to 60 percent.
This … Read More »
Credit goes to EU Trade Commissioner Cecilia Malmstrom for talking up the possibility of a free trade agreement between the European Union and the United States. But is her optimism misplaced? That the 11 non-US signatories of the Trans-Pacific Partnership have agreed to forge ahead with what initially promised to be the most ambitious regional free trade to date suggests that they consider any attempt to renegotiate the deal with the US to be a waste of time. So perhaps expecting the EU and US to make progress on what could be the world’s most complex FTA to date in the current political environment is unrealistic. Besides, the US perhaps has enough in its trade inbox to cope with for now after formally beginning the legislative process to renegotiate the North American Free Trade Agreement, which is unlikely to be a smooth … Read More »
Just 20 years ago, had anyone suggested that China would become an economic powerhouse, people would likely have thought they’d lost the plot. A communist governed nation with a capitalist economy? Impossible!
Post-2008 financial crisis, when the developed West was contemplating how to pull back from the precipice not of recession, but depression, and one wonders quite how the world economy might have coped without China’s dragon-fired growth. This has created a strange dichotomy: China the superhero, helping to keep advanced economies from the jaws of dire austerity; and China the supervillain, accused of protectionism and worse.
Indeed, China looks to be increasingly comfortable grabbing some of the center-stage limelight, having delivered a confident speech at the annual Davos gabfest on how the country is looking outwards globally, as well as pushing ahead with leading negotiations on the Regional Comprehensive Economic Partnership. Is China … Read More »
It’s quite a feat on the tax front that war-torn Ukraine has a substantially better tax system than Brazil, according to Paying Taxes. But at 107th in the league table, it is an understatement to suggest that there is still ample room for improvement. But, unlike Brazil, Ukraine is at least making an attempt to remedy the problem. The launch of a public consultation on the state of the tax system, intended to supply the Government with ideas on how things can be improved, is the latest in a number of recent initiatives designed to ease the country’s tax and regulatory burden. Other examples include the launch of a new customs management system earlier this month, the creation of an expert working group on tax reform in June, and the approval of draft tax administrative reforms in April, aimed at bringing … Read More »
Britannia may no longer rule the waves, but it is still the world’s fifth-largest economy, home to arguably the most important financial center in the world (I’m never quite sure how such things are measured, but it’s right up there with New York), and remains something of a force on the world diplomatic stage. It is therefore unsurprising to see so many countries express an interest in doing trade deals with the UK. And, after a worrying period during which the country appeared to have politically decapitated itself, it is also encouraging to at last see the embryo of a Brexit plan emerge, with the Government now keen to sell Britain to key developed and emerging economies.
A word of warning for the UK though: don’t get your hopes up too soon. Despite the encouraging feedback the UK has had from … Read More »