IATA slams 'catastrophic' tax haven ruling in Brazil

IATA urged Brazil Thursday not to list Ireland as a tax haven, a decision that would increase taxes on aircraft leases for Brazilian carriers struggling to regain profitability. In an effort to dissuade Brazilian companies from moving to tax havens, Brazil's govt announced a week ago it would add Ireland, Austria, Curaçao and Saint Martin to its list of countries denominated as such, as of Oct 1. Brazilian law requires companies registered in listed tax havens to pay a 25% tax rate on their contracts. IATA said Brazil was already a very expensive place for carriers to do business and the tax ruling would undermine efforts to compete with rivals in nearby Chile and Argentina. "It will cause havoc and have a catastrophic impact on the ability of Brazilian airlines to become financially sound," IATA VP Peter Cerda said. <br/>