US and Europe clash over tax breaks

Washington is pushing for the rules to be tightened which currently allow foreign companies to reduce their US tax payments by billions of dollars a year, according to reports in the press.

‘This will be viewed as a major disincentive to foreign investment in the US,’ claimed Todd Malan of the Organisation for International Investment, a Washington lobbying group for foreign owned companies.

The move will raise fears in Europe that the US is responding to the European Union’s victory in the World Trade Organisation against a $4bn (£2.7bn) US tax break for exporters known as the Foreign Sales Corporation scheme.

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