Trade and Tax

The Issue

Global trade liberalization efforts help raise standards of living and increase consumer choice around the world. Free trade policies enable access to goods, services and technologies that grow domestic markets particularly in emerging countries. Market access and fair treatment of investments facilitate access to feedstocks and enable further investment in manufacturing environments. Ultimately, this access brings growth, prosperity and product development to countries around the world. Free and fair trade provides opportunities for all countries to increase their standard of living, expand consumer choice, and improve access to education and job opportunities.

Our Global Position

Dow supports the development of a global, rules-based trading system, as embodied in the World Trade Organization (WTO), to foster economic growth and sustainable development around the world. However, over the past decade, the WTO itself has struggled to bring meaningful multilateral commitments.

Dow continues to support the value-add that the WTO brings – both as a center for multilateral dispute resolution and currently as driver of plurilateral agreements, such as:

- Trade Facilitation Agreement (TFA): Signed in Bali in November 2014, this agreement encourages countries to adopt national plans to demonstrate how they will make customs administration and processing more efficient, transparent and enable quicker access to market. For Dow, these become critical opportunities to eliminate customs delays and facilitate more streamlined access to market.

- Information Technology Agreement (ITA) 2: designed to eliminate tariffs on IT products, this agreement is good for our customers in the advanced electronics space.

- The Environment Goods Agreement (EGA): The EGA reduces or removes tariffs on products as a means to promote trade and adoption of green technologies with a demonstrated environmental benefit.

Our Goals

Dow is actively engaged in promoting policies that resolve trade barriers and enhance overall market access to provide a level playing field for the chemical industry globally. Ultimately, our actions are dedicated to facilitating Dow’s overall transformational strategy and supporting our engagement in the global economy.

Dow promotes trade issues in a variety of ways, including multilateral negotiations and dispute settlement within the WTO; bilateral/regional negotiation between governments ranging from full scale negotiations of free trade agreements to precursor, consulting dialogue discussions; and investment negotiations between countries to ensure fair, transparent treatment for all global investors.

As a multinational company operating across the globe, Dow is well positioned to engage in a wide range of negotiations that impact our business, including the Trans-Pacific Partnership (TPP); the Regional Economic & Cooperation Partnership (RCEP); EU bilateral negotiations such as with Vietnam and Japan; and the Transatlantic Trade & Investment Partnership (TTIP).

Our Actions

- Support progress at the WTO on a range of plurilateral agreements, such as TFA, EGA and ITA.

- Lead the chemical industry’s advocacy in support of regulatory cooperation through an International Council of Chemical Associations (ICCA) effort designed to encourage risk-based, sound science approaches to chemicals management.

- Driving Dow specific interests in a range of key agreements.

- Advocate for tariff reductions as well as the removal of the non-tariff barriers which include customs inefficiencies, lack of transparency and diverging regulatory barriers that impede the free flow of products, services and technologies.

- Work locally to ensure that trade preferences programs support domestic manufacturing, including duty suspension, export control reform and other policies.

- Advocate for implementation of completed agreements, such as the TPP.

- Build relationships with stakeholders involved in trade discussions, from governments to our customers, to advocate for trade around the world that improves people's lives and enables sustainable development.

Corporate Taxation

Dow’s commitment toward leadership, innovation, and action in Sustainability includes its approach on corporate taxation.

Dow operates in more than a hundred countries around the world. Dow aligns its tax policies, procedures, and principles consistently to ensure that it ethically complies with the laws in these countries.

- Dow applies tax practices that comply with respective countries’ tax laws and regulations

- Dow does not implement structures for the sole purpose of tax avoidance

- Dow acts in accordance with international guidelines in its application of transfer pricing such as the OECD, and aligns with the arm’s length principle

- Dow’s tax staff has qualified tax professionals with experience and education in taxation

- There are strong internal controls and procedures in place to minimize risk in reporting, compliance, and other areas of tax application

- Tax risks are considered relating to: changes in rates, legislation, repatriation of earnings, tax controversy, and other areas

- Dow discloses expanded information on revenue, income before taxes and taxes in footnotes to its financial statements