Clinton stuns with tough budget Bill Clinton’s latest budget includes numerous international tax proposals and tax shelter provisions. Hal Hicks, David Benson, Margie Rollinson, and Peg O’Connor of Ernst & Young in Washington DC analyze the budget, and explain court and treaty developments
UK moves to close M&A tax loophole The UK Inland Revenue has acted to close what it sees as a loophole in tax law that allows companies involved in international mergers and acquisitions to avoid a 1.5% tax. A number of recent transactions, including the BP/Amoco merger, the Astra/Zeneca merger and the Vodafone/Airtouch deal, were structured to benefit from an exemption which allowed the companies to avoid the 1.5% stamp duty reserve tax.
Thommessen, Krefting hammers out metal buy French state-owned company Eramet SA has bought 25% of the Norwegian metals company Elkem. The transaction is worth $204 million. Eramet will control two of Elkem’s magnesium smelting plants. The transaction was conducted under English law, and so involved law firms across four jurisdictions.
Wachtell, Lipton in Internet sale New York law firm Wachtell, Lipton, Rosen & Katz is advising USA Networks Inc, the cable shopping channel, on its acquisition of the internet search engine Lycos.
Norton Rose advises on AXA deal Norton Rose in London is advising French insurance company AXA on the acquisition of UK insurers Guardian Royal Exchange. The deal is valued at $5.6 billion.
Linklaters in mobile phone contract UK firm Linklaters is advising Vodafone on its $63 billion acquisition of US telecommunications company Airtouch.
Yahoo! and Geocities look to the specialists Leading US internet company Yahoo! is acquiring GeoCities for $4.7 billion in a pooling of interests transaction. The deal will give Yahoo! the widest reach on the internet, recovering ground recently lost to America Online and Microsoft.
Slaughter & May advises Abbey National UK firm Slaughter & May advised the Abbey National Group on the acquisition of three finance businesses from NatWest Group.
Eversheds in $432 million property securitization NHP has completed one of the largest securitization issues in the UK to involve receivables from property investments. The £265 million ($432 million) fixed rate bond, issued through Care Homes No. 2 Limited, was backed by income from 103 nursing home leases.
Simpson Thacher & Bartlett produces chemical reaction Chemical company Rohm & Haas is acquiring rival firm Morton International for $4.6 billion. The purchase will be paid two-thirds in cash and one-third in stock.
Allen & Overy in $900 million air finance deal UK law firm Allen & Overy advised the Tokyo and London offices of Banca Commerciale Italiana (BCI) and Banca Commerciale Italiana (Ireland) plc in the acquisition of $900 million of Sanwa’s air financing business.
Davis Polk ensures success New York firm Davis Polk & Wardwell is advising New Jersey-based insurer Chubb Corporation in its acquisition of Executive Risk, a US insurance company. The transaction is valued at $850 million.
Plesner & Grønborg partner resigns amid fraud scandal One of Denmark’s leading tax advisers Robert Koch-Neilsen of law firm Plesner & Grønborg, has resigned his position at the firm following a financial scandal involving one of his clients. Kurt Torsen, a development entrepreneur, is under investigation by the Danish police after a signature on guarantees used by him to raise money for his projects was found to be false.
De Brauw poaches Buruma’s tax team Netherlands law firm Buruma Maris has lost its entire tax practice to the Dutch Linklaters & Alliance member, De Brauw, Blackstone, Westbroek.
US and Venezuela make treaty history After years of debate, delay and controversy, the US has signed its double tax treaty with Venezuela. It is the first between the US and a Latin American country outside of NAFTA members. The treaty breaks new ground as Venezuela, like many other Latin American jurisdictions, has a territorial tax system. The hope is that the precedent set will be followed throughout the region.
Ernst & Young scoops leading Canadian lawyer They’ve done it again. Less than two years after recruiting Robert Couzin from Stikeman, Elliott, the Canadian office of Ernst & Young has swiped another leading tax partner from a law firm. This time the partner in question is Ron Sirkis who until this month was head of tax at Bennett Jones Verchere.
Global tax cuts ease the pressure It may not feel like it, but corporate tax rates around the world are falling. And residents of developing countries are already benefiting from the types of reduction that their counterparts in OECD countries can only dream about
Pünder’s loss to Shearman signals tough times ahead German law firm Pünder Volhard Weber & Axter has paid a high price for the breakdown of its international network, losing four tax lawyers and three other tax professionals to US firm Shearman & Sterling.
Ernst & Young compromises over one-stop shops The Dutch Bar Association has made an agreement with Moret Ernst & Young over the ties between the accounting firm and it’s legal services arm. The agreement, which is similar to one recently signed between the bar association and KPMG, ends 12 months of negotiations between the two organizations.
Airtouch seeks IRS ruling on Vodafone merger Airtouch Communications Inc is seeking a ruling from the US Internal Revenue Service (IRS) due to fears that their $58 billion merger with Vodafone will not satisfy a requirement for tax-free transactions.
News in Brief Bond market fails to win exemption, Manx Treasury reveals 15% company tax, Indonesia gives tax breaks to revive economy, Loss of revenue reveals Japanese troubles
TaxFax If you’re already frightened by the year 2000 problem, here’s more gloomy news for you. The New Zealand Inland Revenue has issued a greatly sympathetic leaflet, reminding us all that computer failure is no excuse for not paying taxes.
Germany tightens ratio structure Despite initial hopes that the German reforms would leave thin capitalization untouched, it looks likely that the debt-to-equity ratios will be changed. Norbert Meister, of Bruckhaus Westrick Heller Löber, analyzes the implications for multinationals
When it pays to talk to the taxman Revenue authorities are keen to appear to be as open as possible and to consult business when preparing major legislation. But how beneficial is consultation? Rosie Murray West asks whether the words are falling on deaf ears
Back to the drawing board for Canada? Proposals to reform Canada’s interest imputation rule have provoked debate. Elinore Richardson and Angelo Nikolakakis of Stikeman, Elliott, Montreal and Toronto examine the proposals and outline the arguments against their unqualified adoption
Switzerland fights back with benefits In the global race to attract multinationals through tax incentives, Switzerland has been losing out. Markus Neuhaus of PricewaterhouseCoopers, Zurich reports on a series of laws and regulations designed to win back old investors and attract new ones
Unleashing supply chain potential In the second of his articles on the advantages available to multinationals from supply chain management, Les Secular of Ernst & Young in London reveals how organizations can create effective structures while minimizing the potential tax risks
Vietnam turns up the fiscal temperature A recent circular from Vietnam’s Ministry of Finance has introduced extensive regulations for foreign investment. Tony Foster of Freshfields in Hanoi examines the consequences for multinationals who must now adopt Vietnamese accounting principles
Netherlands offers new certainty In the first of our series of articles on advance pricing agreements around the world, Monique van Herksen of Stibbe Simont Monahan Duhot analyzes how the Netherlands APA system offers a new element in the traditionally strong Dutch advance rulings procedure
Canada seeks brighter APA future The Canadian APA programme has had a rocky start since it was established in the early 1990s. But, as George Will of KPMG LLP, Toronto reports, a new attitude on the part of Revenue Canada could encourage more multinationals to seek the certainty of an agreement
Australia aims to allay APA fears Australian APAs are becoming an increasingly popular tool. But, as John Donaldson of KPMG in Melbourne explains, the Australian Tax Office still has some work to do to convince taxpayers that the process is secret and speedy enough to merit serious consideration
