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Controversial US Export Tax Break Repealed

by Glen Shapiro, LawAndTax-News.com, New York

15 May 2006

It emerged last week that Congress has repealed a controversial tax break for exporters, meaning that EU will not now reapply additional duties on goods imported from the United States.

Inserted into the tax reconciliation legislation which passed the Senate by 54 votes to 44, having previously passed in the House, the repeal of the remaining benefits under the now-defunct Foreign Sales Corporation and Extraterritorial Income Exclusion Act regimes has been welcomed by the European Union.

Speaking to the AFP news service following the vote on the wider tax bill, which must now be signed into law by President George W. Bush, EU Trade Commissioner, Peter Mandelson announced last week that:

"The EU, which had been authorized by the WTO to enforce retaliatory measures if the tax benefits were not removed, will now withdraw the reintroduction of sanctions foreseen for May 16."

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