EU TAXATION OF U.S. ASSISTANCE

UNCLAS BRATISLAVA 000598

SIPDIS


E.O. 12958: N/A
TAGS: KSCA TSPL PREL EAID LO EUN
SUBJECT: EU TAXATION OF U.S. ASSISTANCE

REF: STATE 129219

ON JUNE 16, ECONOFF SPOKE WITH THE MINISTRY OF FINANCE'S
DIRECTOR GENERAL FOR TAXES AND CUSTOMS, BRANISLAV DURAJKA,
AND THE DIRECTOR FOR INDIRECT TAXES, ADRIAN BELANIK, PER
REFTEL. OUR DISCUSSION SHOWED THAT THIS SUBJECT HAD NOT YET
BEEN BROUGHT TO THE ATTENTION OF THE GOS, BUT DURAJKA SAID
THE SLOVAKS WOULD ENGAGE THE EUROPEAN COMMISSION ON THIS
SUBJECT. HE EMPHASIZED THAT A DECISION MUST BE MADE ON A
EUROPE-WIDE BASIS, BUT THAT LAWS COULD BE CHANGED. HE
DEFENDED THE PHILOSOPHY THAT IF ASSISTANCE FUNDS COULD ENTER
A COUNTRY FREE OF VAT, BUT THE GOODS THEY BOUGHT WOULD BE
CHARGED VAT, THEN THERE EXISTED A RATIONALE FOR CHARGING VAT
FOR COMMODITIES GIVEN AS ASSISTANCE. HOWEVER, HE SUGGESTED
AN EXCLUSIVE U.S.-EU AGREEMENT COULD POSSIBLY BE ARRANGED TO
AVOID CHARGES ON ALL FORMS OF ASSISTANCE.
WEISER

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