V. Fill in the blanks with suitable prepositions.
Average tax rates were indeed 12 percentage points higher … the core than … the periphery in 1965, just eight years … the Treaty of Rome. Integration then deepened and capital became more mobile, yet countries did not race … the bottom. Quite the reverse: tax rates rose … both the core and the periphery. The gap between their average tax rates also grew. It peaked … 16 percentage points … 1978, the year before the European Monetary System came … force. As integration deepened over the following two decades, the tax gap narrowed steadily. By the 1990s, it had shrunk … seven percentage points.
VI. Give Russian equivalents for the following words and phrases used in the text:
tax competition; capital income; return on investment; a cluster of capital; the trend in tax differences; growth in information technology; falling transport costs; public spending.
VII. Translate into Russian the following sentences from the text:
1. In the EU, so the traditional argument goes, allowing tax rates to vary across jurisdictions would distort the entrepreneur's choice of location.
2. Such a "race to the bottom", the argument continues, would result in tax rates that are too low from a "social" standpoint.
3.This argument hangs on some weighty assumptions.
4. As integration deepened over the following two decades, the tax gap narrowed steadily.
5. Come the moment when capital becomes fully mobile around the world, tax harmonisation may have its day.
VIII. Summarise the article, using the words and phrases given below:
to stamp out "unfair" tax competition; to start a company; to lower taxes;
to bunch together; to encourage agglomeration; to do away with the benefits of agglomeration.
IX. Translate into English:
1. Страны-члены ЕС на две группы - центр и периферию – на основе системы налогообложения.
2. Благодаря преимуществам, которые дает скопление капитала центральные страны могут устанавливать более высокие налоговые ставки, не опасаясь бегства капитала.
3. По мере развития интеграции сокращается разрыв в размерах налоговых ставок центральных и периферийных стран еврозоны.
4. Гармонизация налоговой системы может привести к тому, что страны на периферии будут вынуждены повысить налоговые ставки.
5. Центральным странам Европейского Союза придется сократить налоговые ставки, а также государственные расходы.
X. Study the text in several groups.Discuss the following statements:
- Economic theory is a ground for tax harmonization.
- The benefits of agglomeration.
XI. Meet as one group. One of you should lead the meeting. Comment on the following statement:
Come the moment when capital becomes fully mobile around the world, tax harmonisation may have its day.
Text 4
Customs Duties and VAT in Europe
Pre-reading task
Read the text, answer the question and say what problem it is devoted to.
What can help companies get the best deal on customs duties, foreign taxes and VAT?
Effective tax planning is one area that may help to reduce overall costs.
Customs duties are an obvious target for goods' exporters. Such steps as a careful examination of tariff classification can produce sizeable savings.
Considering how goods are valued for customs duty purposes allows a manufacturer to eliminate from the calculation of customs duty the costs of production, including labour, after the first sale for export, as well as any profit element.
It is also possible to strip out some of the cost components when determining the customs value. Some countries will allow certain cost inputs to be ignored, such as buying commissions, transport management fees, intellectual property license fees, and financing charges. If these rules are applied carefully, the cost of importing goods in foreign markets can be whittled down.
Although exports are zero-rated, the exporter has to be able to prove that the goods are exported. If the zero rating is lost because the documentation and systems are poor, it is an unnecessary cost. Customs will insist on proper proof of export.
This is particularly important in Europe because the VAT requirements for removal to another member-state differ from those outside the community.
Exported goods pass through customs controls when leaving the UK. The evidence required for a removal is often similar to the documentary proof required for an export but, in addition, the EC customer's VAT registration number is needed.
The international aspects of corporation tax planning are also important. While the UK corporation tax rate is just 30 per cent, the rate will be considerably higher for profits earned through branches or subsidiaries located in many overseas markets.
The UK's network of more than 100 tax treaties ensures that local tax is not paid on business profits where there is no permanent establishment.
A permanent establishment exists where there is a fixed place of business, such as a local branch or office through which the business is conducted.
Text-study