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Khoonming Ho

Janne Juusela The European Court of Justice (ECJ) has rendered a judgment in a case concerning Finnish taxation of dividends paid to foreign pension funds (Commission v Finland, C-342/10, November 8 2012). According to the judgment, Finland has breached free movement of capital by introducing and maintaining a scheme under which dividends paid to foreign pension funds are taxed in a discriminatory manner in comparison with Finnish pension funds. According to Finnish tax legislation, dividends received by a domestic pension fund are, in principle, taxed at an effective rate of 19.5 %. Dividends received by a non-resident pension fund are subject to a rate of tax of at least 15% in accordance with the double taxation conventions or a tax rate of 19.5% in accordance with national tax legislation.

Chizuko Tomita Under the recent tax reforms, major changes to the General Law for National Taxes were enacted to protect taxpayers' rights.

Jamal Afakir

Jelena Zivkovic The government issued a new regulation (Official Gazette of Montenegro no 51/12) concerning the recognition of fees as an overpaid tax, which employers pay for professional training of their employees. Specified by this regulation, the fees paid by the employer for the training of professionals, are recognised as overpaid taxes.

Keith O’Donnell

Zuzana Slavikova In Bratislava, on December 6 2012, OECD Secretary General Angel Gurria said: "The Slovak Republic has one of the highest growth rates in the OECD and is seen as an attractive environment for foreign investment". While remaining one of the strongest in the eurozone, because of substantial investments, primarily in the automotive sector, the economy has slowed, because of reduced demand and weakened investor confidence. Growth is projected at 2% in 2013 and 3.4% in 2014, down from previous years. The announcement accompanied and OECD economic survey Economic Survey of the Slovak Republic. The report stated that the Slovak Republic is weathering well the storm that has struck its main European trading partners. However, it cited a number of challenges going forward in restoring public finances while reducing unemployment and developing programmes for long-term inclusive growth. Three priority areas for action were identified: Strengthening the fiscal framework; Reduceing unemployment while introducing effective labour market policies increasing the efficiency and scale of the public employment system and investing in people's skills; and Boosting education, raising the quality of teaching and allocating more resources to support disadvantaged pupils. Slovakia's new government (led by Robert Fico who took office on April 4 2012) has adopted several measures to directly or indirectly reduce the public debt. One of these measures is, an extraordinary levy on banks (an additional 0.1% of the respective basis to the already existing 0.4% bank levy) and on 10 regulated industries (the rate being 0.00363% applicable on energy businesses, insurance, public health insurance, pharmacy, postal services, railway and airplane transport, electronic communication) introduced this past summer. The government has also recently approved legislation to replace the previous flat rate of tax (19%) with a corporate tax rate of 23% and a progressive individual tax capped at 25% in 2013. While recognising the economic results of these initiatives and the impact of the new increased social security tax on redistribution in the tax system, the report also recommended that the structure of taxation could be made less harmful to growth, notably by focusing on property, consumption and environmental taxes and lowering taxes on low wages. The efficiency of the tax system could also be improved by combating tax evasion further and unifying tax collection.

Jim Fuller

A monthly commentary on the notable facts, figures and goings-on in the tax world. Suitable items should be sent to sshaheen@euromoneyplc.com

Online retailer Play.com has shut down its once profitable Jersey business, which thrived because of the low value consignment relief (LVCR) VAT loophole. The move is a blow to the Channel Islands' economy, but has been welcomed by UK businesses undercut by their offshore rivals.