update on commodity tax & customs issues for manufacturers ... · for manufacturers &...

Update on Commodity Tax & Customs Issues for Manufacturers & ExportersBy Jamie M. Wilks, Partner Commodity Tax, Customs and Trade Law

Presented at:Federated PressTransactional Commodity Taxation Course

November 13 and 14, 2008The Novotel Hotel, Toronto45, The Esplanade

McMillan LLP181 Bay Street, Suite 4400Toronto, ON, M5J [email protected] (T) 416.865.7804 (F) 416.865.7048www.mcmillan.ca

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TABLE OF CONTENTS

Slide Nos.A. GST Relief on Exports 4-5B. Place of Supply of Goods 6C. Zero-Rated Exported Supplies of Goods 7-20D. GST Rebates for Recipients of Supplies

of Exported Goods 21-22E. Other GST Rebates for Exported Goods 23-25F. “Exported” Services 26-27G. Whether Goods or Services or Both? 28-33

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TABLE OF CONTENTS

Slide Nos.H. Zero-Rating Export of Specific Services 34-35I. Export Trading Houses (ETHs) 36-38J. Export Distribution Centres (EDCs) 39-42K. GST Relief on Imports 43-45L. Duty Relief on Imports 46-49M. Quebec Sales Tax (QST) and Provincial

Retail Sales Taxes (PST) 50-52N. World Trade Organization (WTO) Cases 53-59

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A. GST Relief on Exports

Policy Objectives:

– To allow domestic suppliers to compete on a level playing field with foreign suppliers.

– To relieve GST from taxable supplies intended for consumption, use or supply outside Canada (outside the taxation zone).

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A. GST Relief on Exports

Certain important definitions under s. 123(1) of the ETA to consider:

“Recipient” is

a) person liable for the consideration under the agreement for the supply; or

b) where (a) is n/a, the person liable to pay that consideration; orc) where no consideration payable, certain default rules apply.

“Consumer” is

– an “individual” (i.e., “a natural person”) acquiring for “personal consumption, use or enjoyment”.

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B. Place of Supply of Goods

Sale of goods:

– s. 142(1)(a), ETA; supply made in Canada if goods delivered or made available in Canada to the recipient

– s. 142(2)(a), ETA: supply made outside Canada if goods delivered or made available outside Canada to the recipient

Other supplies of goods, such as by way of lease or licence:

– s. 142(1)(b), ETA; supply made in Canada if possession or use given or made available inside Canada to the recipient

– s. 142(2)(b), ETA; supply made outside Canada if possession or use given or made available outside Canada to the recipient

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C. Zero-Rated Exported Supplies of Goods

Section 1, Part V of Schedule VI to the ETA

Conditions to satisfy:

1. “Recipient” does not have to be a “non-resident” or not registered for GST*, but cannot be a “consumer”.

2. Not an “excisable good” (i.e., alcohol and tobacco).

3. Exported as soon as reasonable after delivery.

*Except in the case of a “continuous transmission commodity” (CTC) where the recipient cannot be registered.

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Section 1, Part V of Schedule VI to the ETA (continued)

Conditions to satisfy (continued):

4. Not for consumption, use or supply in Canada.

5. Not further processed, altered or transformed in Canada before export.

6. The supplier maintains satisfactory evidence of the export.

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3. Exported as soon as reasonable after delivery in Canada “having regard to the circumstances… and, where applicable, to the normal business practice of the recipient”.

– Unexpected delays arising in particular circumstances do not prevent zero-rating of exports. Various examples provided by CRA in GST/HST Memorandum 4.5.2, Exports - Tangible Personal Property.

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4. Not for consumption, use or supply in Canada.

Bam Packaging Ltd. v. The Queen [2001] G.S.T.C. 76 (TCC).

– Ocean shipping containers sold to a Canadian customer to export building packages to Russia are considered used in Canada (even though included in the sale price of the exported building packages); so sale of containers not zero-rated exported supplies.

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5. “Not further processed, transformed or altered in Canada except to the extent reasonably necessary or incidental to its transportation”.

– “Processing” defined in GST Memo 4.5.2. Refers for guidance to CRA’s IT Bulletin 145R, Canadian Manufacturing and Processing Profits - Reduced Rate of Corporate Tax (under section 125.1 of the Income Tax Act).

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– “Further processed” considered in Morin v. The Queen, [2004] G.S.T.C. 48 (T.C.C). Morin’s purchase of log homes for disassembly, export and re-sale to a customer in Japan for re- assembly not zero-rated because “further processed” beyond what was necessary to transport, where pieces numbered and coloured to permit easier re-assembly.

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6. The supplier maintains evidence of export “satisfactory to the Minister” of National Revenue.

Rockwood Motor Products v. The Queen, [2005] G.S.T.C. 84 (TCC).

– Although the Minister (i.e., CRA) was satisfied that the vehicles sold were exported, CRA denied zero-rating export status because the export documentation did not comply with CRA’s requirements in Appendix A of GST Memo 4.5.2.

– The Chief Justice of the Tax Court disagreed. The Minister’s policies should not be elevated to law.

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Uranus Auto Sales Inc. v. The Queen, [2002] 2879 ETC.

– Once again, CRA appeared satisfied that the vehicles sold were exported.

– On an initial audit, CRA led Uranus to believe that bills of sale indicating U.S. and German customers were satisfactory evidence of exports.

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– On subsequent audit, CRA “moved the goal posts”, requiring a form 750I U.S. Entry Summary to substantiate U.S. exports, as suggested in Appendix A of GST Memo 4.5.2.

– Once again, the Tax Court disagreed. Discretion should be exercised in accordance with legal principles. In this case, CRA should have given notice of requiring a more stringent standard of proof after having approved a lower one.

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Niagara Resale Center Inc. v. CAAG for Auto Auction Group Inc., 2000 Carswell Ont 1572, [2000] G.S.T.C. 25.

– Ontario vendor refused to zero-rate exported sales. Purchaser dealers exporting the vehicles to the U.S. brought applications to the Ontario Superior Court requesting the Court direct the vendor not to charge and collect GST.

– Applications dismissed.

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– The problem is that the vendor cannot satisfy this condition until after delivery and the sale is completed.

– Vendor does not want to bear the risks.

– Purchasers could claim rebates under s. 252 of the ETA if exported within 60 days of delivery. The GST cash flow burden, however, undermines competitiveness of Canadian vendors, an important policy objective of the zero-rating export rules.

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Section 12, Part V of Schedule VI to the ETA

a) Supplier ships the goods* to a destination outside Canada;

b) Supplier transfers possession to a common carrier or consignee to ship the goods to a destination outside Canada, where the carrier or consignee is retained by:

i. the supplier on behalf of the recipient of the supply; orii. the recipient’s employer; or

c) Supplier mails or couriers the goods to an address outside Canada.

* Excludes CTCs.

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Why needed?

– In each of the common law provinces (excludes Quebec), under the provincial Sale of Goods Act, delivery of goods to a carrier for the purpose of transmission to the buyer is, in the absence of contrary evidence, delivery to the buyer.

– DDP Incoterm indicating delivery at foreign destination would, for example, be evidence to the contrary. Supply outside Canada under s. 142(2)(a) or (b) of the ETA.

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Other conditions to satisfy:

1. Maintain satisfactory evidence of export.

2. Recipient does not have to be a non-resident and can be a “consumer”.

3. For zero-rated exported supplies made after April 23, 1996, the goods can either be delivered to the recipient or to a third party outside Canada.

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D. GST Rebates for Recipients of Supplies of Exported Goods

Ss. 252(1) and 252.2 of ETA

Conditions to satisfy (other than for certain artistic works produced for export):

1. “Recipient” does have to be a “non-resident”, but cannot be a “consumer”.

2. Goods acquired by the non-resident recipient “for use primarily outside Canada”.

3. Goods exported from Canada within 60 days of delivery in Canada.

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D. GST Rebates for Recipients of Supplies of Exported Goods

Ss. 252(1) and 252.2 of ETA (continued)

4. Not an “excisable good” (i.e., alcohol and tobacco).

5. Not gasoline, diesel fuel or motive fuel for use in the vehicle in which it is transported and exported.

6. Claimed within one year of export.

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E. Other GST Rebates for Exported Goods

Ss. 252(2) and (3) and 252.2 of the ETA

– Special rules in ss. 252(2) and (3) and 252.2 of the ETA for “original literary, musical, artistic, motion picture or other work in which copyright protection subsists”.

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Section 261 of the ETA

Impact Shipping Inc. v. The Queen, [1995] G.S.T.C. 28 (TCC).

– Impact Shipping purchases a vessel for export to India.

– Delivery occurred on January 10, 1994. Export delayed until March 13, 1994 due to difficulty in securing a tugboat to take the purchased vessel to India and subsequent bad weather.

– CRA denies GST rebate claim because vessel not exported within 60 days of delivery. Tax Court agrees an absolute condition, no discretion.

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Section 261 of the ETA (continued)

Impact Shipping Inc. v. The Queen, [1995] G.S.T.C. 28 (TCC).

– Query whether Impact Shipping should have claimed rebate for GST paid in error on a zero-rated exported supply where strict 60-day time period for export under s. 252(1) has expired (rather than exported as soon as reasonable in the circumstances). Can be claimed within 2 years of paying the GST in error.

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F. “Exported” Services

Place of Supply:

– s. 142(1)(g)*, ETA – Services performed in whole or in part in Canada deemed supplied in Canada.

– s. 142(2)(g), ETA – Services performed entirely outside Canada deemed supplied outside Canada

*Subject to sections 143, 144 and 179 of the ETA.

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F. “Exported” Services

Zero-Rated Exported Supply of Services:

– Exception in paragraph (e) of Section 7, Part V of Schedule VI to the ETA for “a service in respect of tangible personal property that is situated in Canada at the time the service is performed”.

– Where a manufacturer in Canada performs contracted manufacturing services on goods belonging to a foreign customer not registered for the GST and the goods are delivered outside Canada, or exported from Canada where conditions similar to those for zero-rating export treatment in Section 1 or 12 of Part V of Schedule VI to the ETA are satisfied, subsection 179(3) of the ETA could possibly deem the services to be supplied outside Canada and to be beyond the scope of GST.

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G. Whether Goods or Services or Both?

Questions to consider:

1. Who owns the original good being processed?

2. What is the essence of the supply?

3. Contract for “work or materials” (i.e., services) or “the sale of goods”?

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Questions to consider (continued):

4. Is there an “accession of materials” (supplied by the processor) to the original good (owned and supplied by the customer) under a contract for services?

5. Single or multiple supplies? Single supply of property or services if different components so interconnected, interdependent and intertwined as to constitute one supply of good or services (not separate supplies of each).

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Robertson v. The Queen, [2002] G.S.T.C. 13

Facts:

– A hunter retains ownership of the animal that he has killed.

– Supplies and materials provided by the taxidermist Robertson constitute 15% to 35% of the total cost. 75% to 85% for his labour.

– The artistic skill, ability and talent of the taxidermist reflected in the quality of the finished mount.

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Robertson v. The Queen, [2002] G.S.T.C. 13 (continued)

Decision:

– Robertson supplies services, with accession of its materials to the hunter’s property (the animal parts), rather than selling goods. Applied SCC income tax decision in Wil-Kare Paving Ltd. v. Canada, 2000 SCC 36.

– Robertson’s reliance on zero-rated exported sales of goods to U.S. hunters under 12, V, VI fails.

– Not zero-rated exported supplies of services under 7, V, VI because of paragraph (a) (services supplied to an individual who is in Canada at any time when the individual has contact with the supplier in relation to the supply) or (e) (services “in respect of” goods situated in Canada).

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Hawkins Taxidermists of Canada Ltd. v. The Queen, [2005] G.S.T.C. 133

Similar facts and decision reached as in Robertson, except w.r.t.:

– The supply and export of its taxidermist materials to other taxidermists outside Canada (sale and export of goods zero-rated under 12, V, VI);

– Specimens killed outside Canada, imported into Canada to be mounted, with mounts subsequently exported to non-resident hunters (zero-rated exported services under 4, V, VI); and

– Replica fish mounts produced 100% from components supplied by Hawkins (sale and export of goods zero-rated under 12, V, VI).

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– Query whether Robertson and Hawkins should have relied on s.179(3) of the ETA in the alternative to deem their supplies of services to be made outside Canada and beyond the scope of GST?

– Not available where the non-resident recipient not registered for the GST is a “consumer”.

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H. Zero-Rating Export of Specific Services in respect of Property Situated in Canada

– In all the cases below the recipient has to be a non-resident, not registered for the GST:

1. 13, V, VI – services in respect of tangible personal or real property, and parts or replacement goods, in fulfilling an obligation of the non-resident under a warranty.

2. 14, V, VI – jig, die, mould, tool or fixture “used directly in the manufacture or production of tangible personal property for the non-resident person”.

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H. Zero-Rating Export of Specific Services in respect of Property Situated in Canada

– In all the cases below the recipient has to be a non-resident, not registered for the GST (continued):

3. 19, V, VI – Destroying or discarding goods.

4. 20, V, VI – “Dismantling property for the purpose of exporting the property.”

5. 21, V, VI – Testing or inspecting goods imported or acquired for that sole purpose, where goods to be discarded or destroyed.

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I. Export Trading Houses (ETHs)

Section 1.1, Part V of Schedule VI to the ETA

– To ease cash flow burden of distributors predominantly exporting goods from Canada.

– To encourage these activities in Canada.

Conditions to qualify as an ETH under s. 221.1 of the ETA:

1. Recipient (the ETH) is registered for the GST.2. CRA has approved recipient’s application to qualify as an ETH.3. As conditions of approval, it can reasonably be expected that during the 12-month

period immediately after the authorization:a) at least 90% of the inventory acquired for re-sale would satisfy the conditions in

paragraphs (b) to (d) of 1, V, VI; andb) >90% of its business income from inventory sales is derived from supplies

made outside Canada.

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Section 1.1., Part V of Schedule VI to the ETA (continued)

– To zero-rate sale of goods* as an exported supply, ETH provides vendor with an export certificate within the meaning of s. 221.1 of the ETA (example in Appendix B of GST Memo 4.5.2 considered acceptable). Should also disclose the ETH’s GST registration #, the export certificate # issued by CRA under s. 221.1 (4), the effective date of CRA’s authorization, and the expiration date of the authorization.

– Unless the vendor knew, or could reasonably be expected to know, that the goods would not be exported or the CRA’s authorization was not in effect, the purchaser (purported ETH) bears the risk for non-payment of GST.

* Excluding an “excisable good” or a CTC.

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Section 1.1, Part V of Schedule VI to the ETA (continued)

– No “imported taxable supply” under s. 217(d) of the ETA and self-assessment of GST by the recipient unless goods not acquired “for consumption, use or supply exclusively in the course of commercial activities of the recipient”.

– Net tax adjustment equal to prescribed interest under s. 236.2 of the ETA regardless of whether or not GST has to be self- assessed to “claw back” potential cash flow benefit to the recipient and to discourage non-compliance.

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J. Export Distribution Centres (EDCs)

Section 1.2, Part V of Schedule VI to the ETA

– To ease cash flow burdens of export-oriented businesses that add limited value to others’ goods in the course of their processing or distribution activities. To encourage them to locate in Canada (or at least discourage them from re-locating outside Canada).

Conditions to satisfy:

1. Recipient (the EDC) is registered for the GST and engaged exclusively in commercial activities.

2. CRA has approved recipient’s application to qualify as an EDC.

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3. As conditions of approval, it can reasonably be expected that during the person’s fiscal year:

a) it will not engage in substantial alteration of property in the year;

b) either i. the person’s value added percentage attributable to non-

basic services will not exceed 10% for the year, or ii. the person’s percentage total value added will not exceed

20% for the year; and

c) at least 90% of the person’s total revenues are export revenues.

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– To zero-rate sale of goods* as an exported supply, EDC provides vendor with an export certificate within the meaning of section 273.1 of the ETA. Should certify authorized to use the certificate at that time, property is “acquired for use or supply as domestic inventory or added property”, and disclose the EDC # issued by CRA under s. 273.1(9) and expiry date of that authorization.

* Excluding an “excisable good” or a CTC.

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Section 1.2, Part V of Schedule VI to the EPA (continued)

– Unless the vendor knew, or could reasonably be expected to know, that the goods would not be acquired for use or supply as “domestic inventory” or “added property” or the CRA’s authorization was not in effect, the purchaser (the purported EDC) bears the risk of non-payment of GST.

– No “imported taxable supply” under s. 217(e) of the ETA and self- assessment of GST by the recipient unless goods not acquired “for consumption, use or supply exclusively in the course of commercial activities of the recipient”.

– Net tax adjustment equal to prescribed interest under s. 236.3 of the ETA regardless of whether or not GST has to be self-assessed to “claw back” potential cash flow benefit to the recipient and to discourage non- compliance.

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K. GST Relief on ImportsGST Relief on imports of the following goods pursuant to section 213 and Schedule VII of the ETA:

1. Schedule VII, s. 5.1 “Goods that are imported solely for the purpose of fulfilling an obligation under a warranty to repair or replace” defective goods, “where replacement goods are supplied for no additional consideration, other than shipping and handling charges, and exported”.

2. Schedule VII, s. 8, Paragraph 3(d) of the Non-Taxable Imported Goods (GST) Regulations

“Goods imported for the sole purpose of maintenance, overhaul or repair of those goods in Canada” (including warranty repairs) where subsequently exported (subject to satisfying certain other conditions).

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K. GST Relief on ImportsGST Relief on imports of the following goods pursuant to section 213 and Schedule VII of the ETA (continued):

3. Schedule VII, s. 8, Paragraph 3(i) of the Non-Taxable Imported Goods (GST) Regulations, Item 16 of the Temporary Importation (Excise Levies and Additional Duties) Regulations

“Articles to be repaired, overhauled, altered or adjusted”.

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K. GST Relief on Imports GST Relief on imports of the following goods pursuant to section 213 and Schedule VII of the ETA (continued):

4.Schedule VII, s. 8.1 Export of Processing Services (EOPS). CRA authorizes registrant importer under s. 213.2 of the ETA. The registrant discloses the CRA authorization # to CBSA when accounting for the imports. The registrant has provided CRA any security required under s. 213.1 of the ETA.

(i ) Goods to be processed in Canada and subsequently exported,

(ii ) goods incorporated into other goods that are processed in Canada and subsequently exported, and

(iii) certain materials consumed or expended in the processing of goods to be subsequently exported.

The processing services are performed on behalf ofa non-resident.

5.Schedule VII, s. 8, proposed amendments to Non-Taxable Imported Goods (GST) Regulations

GST-paid goods unless imported for the first time after having been:(i ) supplied outside Canada;(ii ) supplied in Canada on a zero-rated exported

basis in V, VI, or (iii) supplied to a non-resident entitled to a GST

export rebate under s. 252(1) of the ETA.

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L. Duty Relief on Imports

Duty Relief and Drawbacks:

– Duty relief or drawback for imported goods:

(a) subsequently exported in the same condition;

(b) processed in Canada and subsequently exported; and

(c) directly consumed or expended in the processing in Canada of goods that are subsequently exported.

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Duty Relief and Drawbacks (continued):

– Goods exported within 4 years after import.

– Apply for duty relief using Form K90, Duties Relief Application. Unique certificate number issued to confirm duty relief program participant. Security requirements.

– May be restrictions for relief or drawback of SIMA (e.g. anti- dumping and countervailing) duties.

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Duty Relief and Drawbacks (continued):

– Where imported materials used in manufacturing or production of goods in Canada, and goods produced subsequently exported to Mexico or the U.S., relief or drawback may be restricted to the lesser of:

i. duties on materials imported into Canada; andii. duties, if any, paid to Mexican or U.S. Customs when

manufactured goods subsequently exported.

– Where duty-free export of manufactured goods under NAFTA, no duty relief or drawback allowed.

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Other possible relief available for manufacturing inputs?

– For example, special Canadian tariff item 9958.00.00 for imported:

– “Parts, accessories and articles, excluding tired and tubes, for use in the manufacture of original equipment parts for passenger automobiles, trucks or buses, or for use as original equipment in the manufacture of such vehicles or chassis therefor.”

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M. Quebec Sales Tax (QST) and Provincial Retail Sales Taxes (PST)

– QST rules generally parallel GST rules.

– For exported goods, PST exemptions generally more restrictive than GST zero-rating export rules. For PST export exemptions to apply, the vendor needs to ship, or arrange for the shipping, of the goods to a destination outside the province.

– May be able to rely on another PST exemption. For example, an Ontario vendor may obtain a prescribed PEC from the purchaser of exempt production equipment and machinery. Under the Ontario PST Regulations, a non-resident of Ontario purchasing exempt for re-sale must be licensed for Ontario PST to provide a valid re-sale PEC.

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– PST rebates or refunds available to a purchaser of goods exported from a province in certain conditions.

– Ontario PST Regulation 1012, s.17.1 - PST rebate where

(i) permanently removed from Ontario within 30 days of sale,(ii) claimed within four years of paying PST,(iii) with evidence, if applicable, of PST, QST or other

appropriate taxes paid for the destination province, and(iv) may have been used in Ontario before export.

– Where no consumption or use in Ontario, the purchaser may claim a PST refund under subsections 2(10), (11), (11.1) and (12) of the Ontario PST Act within four years of paying the PST to the vendor, with evidence, if applicable, of PST, QST or other appropriate taxes paid for the destination province.

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– Consider whether any PST exemption available for “exported” services?

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N. World Trade Organization (WTO) Cases

– To protect against tax and duty measures:

1. favouring domestic producers over foreign producers and exporters;

2. subsidizing domestic production or exports; and

3. expropriation of foreign investments.

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N. WTO Cases

Certain recent WTO cases brought by complainant countrieschallenging discriminatory commodity taxes and customs duties:

1. United States – Equalizing Excise Tax Imposed by Florida on Processed Orange and Grapefruit Products (2004), WTO Doc. WT/DS250/3 (Notification of Mutually Agreed Solution), online: WTO http://docsonline.wto.org/gen_trade.asp

– Brazil initiated a complaint contending a Florida statute imposing an “equalizing excise tax” on citrus products grown outside the U.S. was discriminatory against foreign producers and exporters of such products, in violation of its GATT obligation (not to impose taxes on imports on less favourable terms than those assessed on like domestic goods).

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N. WTO Cases

Certain recent WTO cases brought by complainant countrieschallenging discriminatory commodity taxes and customs duties:

1. United States – Equalizing Excise Tax Imposed by Florida on Processed Orange and Grapefruit Products (2004) (continued), – Mutually agreed solution reached under which Florida:

i. Amended the offending statute to allow processors in Florida using Brazilian citrus products to opt-out of paying two-thirds of the excise taxes;

ii. Prevented the remaining on one-thirds from being used to advertise domestic citrus products (its original intended purpose); and

iii. Refunded US $1.5 million excise taxes already paid.

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N. WTO Cases

Certain recent WTO cases brought by complainant countrieschallenging discriminatory commodity taxes and customs duties (continued):

2. China – Measures affecting imports of automobile parts (2006), WTO Doc. WT/DS339/8; WT/DS340/8; WT/DS342/8

– China assesses an import duty on imported automotive parts exceeding a certain number or value at the duty rate for the completed motor vehicle rather than the lower duty rate for the imported parts. Increases the average duty rate on auto parts by 25%, discouraging Chinese auto makers from using imported parts.

– On July 18, 2008, Dispute Settlement Body (DSB) Panel Report finds China has acted inconsistently with its GATT obligations and orders China to bring itself into compliance. In September 2008, China notified WTO members of its decision to appeal the decision to the WTO Appellate Body.

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N. WTO Cases


3. China – Value-Added Tax on Integrated Circuits (2005), WTO Doc. WT/DS309/8 (Notification of Mutually Agreed Solution)

– U.S. claimed producers of integrated circuits in China benefitted unfairly from a reduced Value-Added Tax (VAT) rate on those products (through partial refunds of the VAT), resulting in higher VAT on imported circuits than domestically produced circuits in violation of GATT Article III obligations to treat the imported circuits no less favourably than circuits produced in China.

– In July 2004, U.S. and China advised the DSB that they had reached an agreement, resulting in China eliminating the VAT refunds. In October 2005, they notified the DSB of the successful implementation of the agreement.

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N. WTO Cases


4. Mexico Tax Measures on Soft Drinks and Other Beverages (2006), WTO Doc. WT/DS308/AB/R

– Mexico imposed 20% tax on:

i. soft drinks and other beverages using sweetener other than cane sugar; and

ii. distribution services relating to such products.

– In October 2004, DSB decided in favour of the U.S., finding:

i. the taxes were inconsistent with Article III:2 of the GATT by imposing greater tax on imported products than domestically produced products; and

ii. the taxes were inconsistent with Article III:4 of the GATT, which requires imported goods to be afforded no less favourable treatment than domestically produced goods (National Treatment).

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N. WTO Cases

Certain recent WTO cases brought by complainant countries challenging discriminatory commodity taxes and customs duties (continued):

4. Mexico Tax Measures on Soft Drinks and Other Beverages (2006) WTO Doc. WT/DS308/AB/R (continued)

– In March 2006, the findings were upheld by the Appellate Body.

– Mexico enacted legislation repealing the offending taxes on December 27, 2006.

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