The European Commission has set a deadline of 1 March 2004 for the US government to reform its tax laws or face gradually tightening sanctions. The World Trade Organisation gave the EC the right to impose up to $4 billion in tariffs on US exports, after the USA failed to end a tax break on income earned abroad that gave US exporters an unfair advantage. Sanctions will come into force at 5% - $200 million - in March, rising by one percentage point each month to March 2005. Several bills aimed at gradually reforming the tax code are before Congress, but the EC wants the loophole closed immediately.
Source: Flight International