The Appellate Body of the World Trade Organisation (WTO) sided with the EU’s arguments concerning Brazil’s industrial tax measures that disadvantage EU companies.
The WTO Appellate Body confirmed the initial ruling of August 2017 that numerous Brazilian tax programmes are not in line with WTO rules as they favour domestic products. The programmes disadvantage EU automotive, and Information and Communications Technology (ICT) products by granting tax advantages based on the local content embedded in products. According to the ruling such measures are incompatible with WTO law.
As a consequence of the ruling, Brazil will now have to bring its tax programmes in compliance with WTO rules and remove the prohibited measures without delay.