Sunday, August 01, 2021
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"Buy american" and Stimulus bill

The US Congress has recently passed a law, named “American Recovery and Reinvestment Act”, (so-called “Stimulus Bill”), that introduces a huge tax intervention based on a mix of public expenditure and tax reduction measures for a total spending of $ 787 billions. Section 1605 of this law sets a particular tie to the use of these funds, that can be used only for projects of construction, alteration, maintenance, or repair of a public building or for other public works, where iron, steel, and manufactured goods exclusively produced in the United States are used. There are anyway some limited exceptions to this rule, such as in cases where its application is inconsistent with the public interest; or where iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and are of a satisfactory quality; or in the case where the use of iron, steel, and manufactured goods produced in the United States would increase the cost of the overall project by more than 25 percent.

This provision has proven to be controversial also in the US, where many companies fear that their trading partners abroad will retaliate with similar “buy domestic” provisions, so thwarting their investiments in Europe and Asia. To avoid this effect, Section 1605 introduces to the subsection d) a "safeguard" clause establishing that the "buy american" provisions shall be applied in a manner consistent with U.S. international trade obligations.

 

Sodium glutamate for food use supplies subject to the 20% VAT rate

The clarification comes from Internal Revenue Agency, that after a consultation with the Customs Agency on the proper tariff qualification of such a product, issued the Resolution n. 39/E of 17 February 2009, in response to a ruling of a company producing and selling this good. Doubts arose from the nature and composition of the glutamate, a very common compound used in the majority of daily-consumed food products (es. cheese, bouillon cubes, frozen food, cold cuts, canned food, etc.).

The applicant, in his request of ruling, asked if it is correct to apply the odinary VAT rate to the supply of glutamate. Even though the ruling was inadmissible, the Internal Revenue Agency provided some explainations, highlighting that the above product must be classified with the CN code 2922 4200, corresponding to the heading 29 23 750 of the customs tariff. Accordingly, the VAT rate to be applied to the glutamate supplies must be the ordinary VAT rate (20%), as this good does not hold the characteristics for the application of a reduced VAT rate (4% and  10%) set forth by Dpr 633/1972 with regard to goods listed in Annex A/2 and  A/3 of the decree.

Rules on exporting cultural goods consolidated into a new text

Council Regulation (EEC) n. 3911/92 of 9 December 1992 (concerning the export of cultural goods), now repealed, is going to be replaced on next 2 March by the Council Regulation (EC) N. 116/2009 of 18 December 2008. The new Regulation aims to consolidate the old discipline regulating this sector in a new organic text, with the view of assuring a uniform protection at Community level concerning the export of cultural goods in third Countries. Aspects of novelty are anyway minimal, being Regulation N. 116/2009 a simple gathering of provisions already in force, with only few substantial innovations in the practice.

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Italian Supreme Court: the interpretation of laws contained in administrative circulars and resolutions is not binding neither for taxpayers, nor for the judges

The Italian Supreme Court, with Decision n. 237 of 9 January 2009 re-affirms a principle stated in a previous ruling (Decision n. 23031 of 9 October 2007), according to which circulars and resolutions adopted by the tax administration and interpreting whatever tax provision, are not binding, as they must be regarded only as an advise of the financial administration on the controversial issue. The Supreme Court therefore, in the new ruling reiterates that circulars and resolutions, even if providing instructions or directives to the dependent offices, can be disapplied by the latter, as well as by taxpayers.

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Classification of multi-function apparatus: the European Court of Justice provides some clarifications

The European Court of Justice (ECJ), with the judgment of the Third Chamber of 11 December 2008 (published into the Official Journal of the European Union C 32 of 7.2.2009), issued on the basis of a request for preliminary ruling submitted by the Tribunal d'instance du VIIe arrondissement of Paris within the joined cases “Kip Europe SA, Kip (UK) Ltd, Caretrex Logistiek BV, Utax GmbH” (C-362/07) and “Hewlett Packard International SARL” (C-363/07) v/ Administration des douanes — Direction Générale des douanes et droits indirects, provides some explanations about the classification in the Combined Nomenclature (CN) of multi-function apparatus made up of a laser printer module and a scanner module.

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