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 делятся 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 EU 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.