LG Philips EUR 1 billion investment hinges on changes to VAT law

The characteristics which attract investors include relatively cheap and well qualified labor, low tax and proximity of EU markets. However, TV producers have created an alliance and are demanding that the government introduces changes to the VAT bill, which forces the companies to pay a 22% VAT on imported components. The producers later receive a VAT refund, but the whole procedure takes around 100 days. This way the largest seven companies from the electronics sector have zł.760 million annually frozen. Just days before the final decision where to allocate new LG factories, an investment worth around EUR 1 billion, the Koreans demand that the government changes the VAT regulations. Company representatives have sent a letter stating clearly that the future of negotiations are subject to the introduction of the new set of laws. (Gazeta Wyborcza, pp. 1, 23) A.K.