WHY INTERNAL TAX DEVALUTION IS NOT WORK

INCOME STATEMENT FORMAT FROM INTERNATIONAL COMPANIES:

= SALES (gross)
...

- sales reduction.

= SALES (net)
- direct material costs.
- direct productions costs
- job order production.

= CONTRIBUTION I

- fixed production costs.

= CONTRIBUTION II

- special direct costs distribution and marketing
- distribution and marketing costs

= CONTRIBUTION III

- design/r&d
- order centre
- quality assurance

= CONTRIBUTION IV

- administration
-/+ production variaces
-/+ miscellaneaus absorption areas

= CONTRIBUTION V = OPERATING REPORT

-/+ miscelaneous expenses/earnings

= EBIT

-/+ FINANCING BALANCE

= EBT

% rete of retorn.

As you have seen INTERNATIONAL COMPANIES CAN CHOICE HOW PRICES AND CONTRIBUTIONS MARGINS COULD BE DIFFERENT DEPENDING ON THE MARKET ELASTICITY, SO VAT (IVA) IS A REASON FOR KEEP THE PRIZE DOWN IN OTHER TO KEEP THE PROFITS AT THE SAME LEVEL.

SO, IF FRANCE REDUCE VAT AND SPAIN GET UP VAT, INTERANTIONAL COMPANIES DO WITH THEIR PRICES AND CONTRIBUTION MARGINS THE SAME IN OPPOSED DIRECTION. AND OUR FOREING DEFICIT KEEP IN THE SAME LAVEL, WITH A DIFFERENCE, OUR COMPANIES WILL LOST COMPETITIVITY.