The Brazilian government on Monday (28.1.2019) asked the World Trade Organization (WTO) to give it a "reasonable" period of time to withdraw its tax incentive programs in the technology and automotive sectors, against which the European Union and Japan had protested.
In an intervention before the WTO Dispute Settlement Body, which ruled against these Brazilian tax programs in December 2018Representatives of the South American country said they would implement the ruling but that "immediate compliance was impossible."
The plaintiffs, Japan and the European Union, said they were willing to negotiate with Brazil the necessary extension time, although they stressed that they expected Brasilia to guarantee "full and rapid" compliance with the WTO requirements.
Tax programs (such as INNOVAR-AUTO in the automotive sector) with which the Brazilian Executive sought to promote the internal development of high-value sectors added that they granted tax benefits in exchange for production being carried out in Brazil.
The WTO ruled in favour of European and Japanese demands, according to which these incentives represented discrimination against imported products.
The European Union launched its dispute against seven Brazilian tax programmes in December 2013, Japan launched a parallel procedure in July 2015, and the WTO later merged the two disputes.
Source: Reuters
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