Feeds

US software exports illegally subsidised, rules WTO

And Microsoft may have been a major winner...

  • alert
  • submit to reddit

Internet Security Threat Report 2014

The World Trade Organisation has ruled against a US tax scheme designed to boost exports, and according to Brussels, US software companies have been prime beneficiaries of what the WTO now says is an illegal subsidy. Do we hear the M word? Well yes, we do. Noises coming out of the EU's Directorate General for Trade (DGT)indicate that major winners from the scheme have been Boeing and, yes, Microsoft. The total subsidies (for the whole of the scheme, not just Microsoft) are estimated by DGT at S2.5 billion. It works like this. The US allows US companies to set up Foreign Sales Corporations (FSCs). These have to be incorporated in one of a clutch of US offshore locations (e.g. Virgin Islands, Samoa or Guam) or in another qualifying country. There's quite a long list of these, but the DGT says Barbados is the second most common location (after Virgin Islands), and the list also includes Ireland, which houses Microsoft's European Operations Centre and is the hub of the company's European software distribution operations. The FSC scheme reduces tax paid on export income. The EU argued, and a WTO disputes panel agreed last week, that this constituted an illegal export subsidy. New trade commissioner Pascal Lamy welcomed the ruling, and commented that the subsidy "has created an important distortion of international trade by granting an unfair advantage to US products in third markets, and has expanded over the last decade to more sectors, including computer software and agricultural products." (Our italics) Unsurprisingly, The Register hasn't had a vast amount of success in tracking down US software company subsidiaries with FSCs established in nice places that are tax-efficient. Nor does the DGT specify precisely how much the software business benefits from the scheme. But we did find a Cirrus Logic sub in Barbados, dealing in "purchasing and billing functions." Nice. Any other bids, readers? ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.