CHICAGO, Nov. 28, 2016 /PRNewswire/ -- The World Trade
Organization (WTO) today rejected virtually all of the European
Union's challenges to the Washington
state tax incentives.
In today's case, the EU challenged seven different state tax
incentives. The WTO rejected entirely the EU's challenge to
six of the seven incentives and rejected most of the challenge to
the seventh. The WTO held only and narrowly that a reduction
in Washington state's Business and
Occupancy (B&O) tax rate for future 777X revenues is
inconsistent with the WTO agreements. The WTO threw out all
of the EU's other challenges to various incentive programs and left
untouched even the B&O tax rate as it applies to revenue from
the other Boeing models produced in Washington state--the 737, 747, 767, 777
(current model) and 787.
In total, the EU claimed that Boeing had received $8.7 billion in subsidies. This claim was
rejected by the WTO, which found future incentives totaling no more
than $50 million a year to be
impermissible. The WTO found that to date Boeing has received
no benefit from the 777X rate incentive, and will not until 2020,
because the first airplane will not be delivered until then.
"Today's decision is a complete victory for the United States, Washington State and Boeing," said
J. Michael Luttig, Boeing's general
counsel. "The WTO found in September that Airbus has received
$22 billion in illegal subsidies from
the EU and that without these subsidies neither Airbus itself nor
any of its airplanes would even exist today. By contrast, in
rejecting virtually every claim made by the EU in this case, the
WTO found today that Boeing has not received a penny of
impermissible subsidies."
"The WTO has repeatedly found that Airbus is entirely a creature
of government, and they must now bring themselves into compliance
with the international laws or risk massive sanctions," said
Luttig.
In light of today's decision and the massive liability that the
WTO has found against the EU and Airbus, we expect the EU and
Airbus to appeal today's decision. "After any appeal," Luttig
said, "we fully expect Boeing to preserve every aspect of the
Washington state incentives,
including the 777X revenue tax rate."
Contact: Tim Neale,
703-465-3220
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SOURCE Boeing