Magazine
June 1999

Magazine Archive

UK seeks to end tax privilege

UK companies may be forced to disclose their correspondence with their legal advisers, according to a ruling by an independent adjudicator of tax disputes.
IRS Proposal Allows for Taxpayer Initiated Conforming Adjustments
Ernst & Young aids China Clays deal

Ernst & Young in the UK and France is advising French minerals extraction and processing plant Imetal on its acquisition of English China Clays. The deal is worth £756 million ($1.2 billion).
Davis Polk handles Indian joint venture

US firm Davis Polk & Wardwell is advising Morgan Stanley Dean Witter on its formation of an investment banking sales and trading joint venture in India, with the JM financial group.
Jones Day gets car deal rolling

The Paris Office of Jones Day Reavis & Pogue is acting for Renault on their merger with Japanese company Nissan. The merger, which is valued at $5.4 billion, will create the fourth-biggest car maker in the world.
Cravath Swaine & Moore advises GEC

General Electric Company (GEC) in the UK, is buying Fore Systems, an Internet equipment supplier-based in Pittsburgh for $4.5 billion. GEC has already agreed to sell its defence business to British Aerospace, and is now concentrating on building up its telecoms and internet capability. The acquisition follows GEC's purchase of US telecoms company Reltec.
Skadden Arps in ICI/Huntsman deal

Skadden Arps Slate Meagher and Flom is advising US chemical maker Huntsman on its acquisition of four businesses from its UK rival ICI. The transaction is worth over $2.7 billion. The acquisition will be made through a newly formed company, Huntsman ICI Holdings. ICI will hold a 30% stake in the company, and Huntsman a 70% stake.
Ford calls on Baker & McKenzie

Baker & McKenzie in New York and Stockholm advised Ford on its acquisition of Volvo's car division. The deal is valued at $6.45 billion.
Davis Polk advises on Nabisco tender offers

New York law firm Davis Polk & Wardwell is advising RJR Nabisco and RJR Nabisco Holdings on the cash tender offers and consent solicitations for approximately $4.4 billion of RJR Nabisco's outstanding debt. RJR Nabisco Holdings' Capital Trust is also offering $373.8 million of 9.5% trust originated securities.
Thommesson Krefting sparks petroleum offer

Norwegian firm Thomessen Krefting Greve Lund is advising Norsk Hydro, Norway's largest industrial conglomerate, on their offer to acquire Saga Petroleum, the third-largest oil company in Norway. Norsk Hydro have offered NKr 17.5 billion ($2.3 billion) for Saga. If the deal is completed Norsk will be the largest oil company in Norway after the state-owned Statoil.
HSBC turns to Cleary Gottleib

US firm Cleary Gottlieb Steen & Hamilton is advising HSBC on its acquisition of Republic New York and Safra Republic. Safra Republic is the Luxembourg holding company for Republic's European operations. The acquisition is valued at $10.3 billion and will give HSBC the third-largest branch network in New York as well as a large base of private clients.
Carter Ledyard in media merger

Carter Ledyard & Milburn are advising UK group United News & Media on their acquisition of CMP Media, the US media group. United will add the Internet and print publishing businesses of CMP to its interests in PR Newswire and the UK's Channel 5 and other TV companies. The deal is worth $920 million. United News will pay $39 for each CMP share.
Brobeck Phleger in Internet deal

Brobeck Phleger & Harrison advised Rhythms NetConnections Inc, a US Internet connection provider, on its offerings of shares and debt.
Simpson Thacher consulted on cable deal

Simpson Thacher & Bartlett is advising Bermuda telecoms company Global Crossing on it's acquisition of Global Marine.
Baker & McKenzie loses out in US

Two former colleagues from Baker & McKenzie will find themselves competing for business after being recruited into big five firms. Phil Morrison, a tax partner from Baker & McKenzie in Washington, has joined Deloitte & Touche as leader of the International Tax Group of the Washington National Tax Practice.
Austria proposes extensive cuts

The Austrian government has put forward draft legislation setting out a Sch32.5 billion ($2.5 billion) package of tax cuts.
KPMG announces UK legal move

KPMG has announced its intention to move into the UK legal market by poaching six partners from London law firm Arnheim Tite & Lewis.
France proposes tax change to fund shorter hours

French finance minister Dominique Strauss-Kahn, and labour minister Martine Aubry have put forward a plan to introduce a surcharge on corporation tax and raise environmental taxes.
Canada to allow branches for foreign banks

The Canadian Department of Finance has proposed transitional tax rules for foreign banks that wish to convert from a subsidiary to a full-service branch.
China tightens grip on processing trade

China has introduced tighter controls on processing trade activities to preserve tax revenue.
New tax threat to bond market

A tax reform in the UK Finance Bill threatens to harm the Eurobond market, lawyers are complaining. The Bill aims to close a loophole in the tax treatment of bonds redeemable at a premium over their issue price, but the lawyers worry that the reform extends beyond the loophole and will harm the tax treatment of standard bonds. The move comes while the UK government continues to campaign against the proposed EU withholding tax because of its claimed threat to the bond markets.
News in Brief

Ernst & Young acquires compliance firm, Tax probe reveals JAL discrepancies, Colombia extends banking tax, Brazil offers concessions to states, Venezuela offers tax breaks to oil investors, Japan reforms stock and bond tax, Mexico's maquilas fear tax change
Taxfax

Watson Farley promotes tax lawyer to top spot, Herkenroth swaps Andersen for Ashursts, Casino owners hit tax jackpot, Accountancy nerds knocked off blackspot, Driver eats evidence of unpalatable crime, Savory takes the softer option, Experience available: any takers?
Japanese vehicle faces uneasy start

Japan’s new domestic special company will ease liquidation and securitization for domestic and foreign corporations. But as Dean Yoost and Sachihiko Fujimoto of PricewaterhouseCoopers in Tokyo argue, its stringent requirements mean other vehicles retain an appeal
Singapore widens fiscal incentives

Singapore’s minister of finance used this year’s budget to stimulate the economy by extending tax incentives for domestic companies and foreign investors alike. Ajit Prabhu of Deloitte & Touche, Singapore examines the budget and its consequences for multinationals
Cyprus-Russia treaty creates new harmony

Cyprus’ treaty network with eastern European jurisdictions has provided new opportunities for offshore tax planning. Constantinos Adamides of Adamos K. Adamides & Co examines the provisions and possibilities offered by the Cyprus-Russia treaty
IRS extends grouping opportunity

In a busy spring, the IRS has ruled on issues such as transfers of foreign stock and product grouping, and the courts have spoken on attorney-client privilege. Hal Hicks, David Benson and Marjorie Rollinson of Ernst & Young, Washington report on the latest developements
ECJ casts doubt over Bachmann

New directives and a number of recent cases have brought the conclusions of the 1992 Bachmann case into question. Hans van den Hurk of PricewaterhouseCoopers, Eindhoven examines the consequences for insurance taxation in the Netherlands
Corporates revolt at CFC expansion

Over the next two months, International Tax Review will publish a series of features examining CFC regimes around the world. Recent years have seen a rapid expansion of the scope of such regimes. Oliver Ralph reports on how multinationals are beginning to fight back
UK CFCs leave room for manoeuvre

The UK’s CFC regime is now 15 years old but ambiguities remain over which companies are affected. James Savory of Allen & Overy in London explains the system and comments on the consequences of the introduction of self assessment
Australian review spurs CFC rethink

Australia’s CFC regime has not escaped the recent review of business taxation. Alastair Macphee of Mallesons Stephen Jaques, Melbourne looks at the proposals and examines how group consolidation could cause problems for companies with CFCs
Recent court decision sows confusion
Tax Reform Proposals
Defining “TECHNICIANS”
Ireland as a holding company regime
Date of withholding regulations postponed