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Rajendra Nayak

Arcadie Parfenie, Ernst & Young Over the last few years and especially after the accession of Romania to the EU, national borders in international and European trade have faded and globalisation of the economic activities has increased. Within this global context, the mobility of capital flows is substantial and as a result, international tax structuring became an important aspect for investing in the domestic market as well as for investing outbound. Though most of the multinational companies investing in Romania already have the investment structure designed by foreign tax advisers, the local markets, where only typical structures for holding investment and straight financing are used, represent an area of interest for all local tax advisers. Tax planning is becoming more complex and planning techniques more sophisticated. We should talk about the possibility of using hybrid loans which are treated differently by the country receiving the financing and the country providing it, which typically obtain a deduction in the entity receiving the finance with the corresponding return partially or totally exempt at the level of the recipient. The use of a hybrid entity which is treated as a separate taxable person by one country while being treated as transparent in another country, conversion of the dividend flows into interest or the other way around and debt push down to erode the taxable base.

Sabine Graziosi, KPMG A second series of tax measures announced in the government agreement of December 1 2011 is included in a new draft program law. The most important measures affecting companies deal with the conditions of the exemption of capital gains on shares, the extension of thin capitalisation rules and a complete rewriting of the general anti-abuse measure.

The Australian High Court has ruled that buildings manufacturer James Hardie did not owe capital gains tax as a result of a 1998 restructuring.

There is continued debate about the pros and cons of a financial transactions tax (FTT). It is a subject which does not want to go away. Writing in a personal capacity, Chris Lenon, who chairs the Tax Committee of the Business and Industry Advisory Committee to the OECD, explains why the tax worries business.

Sead Dado Salkovic, Eurofast Global The new tax law on property in Republika Srpska (RS) became effective on January 1 2012.

In Belgium a common tax planning technique is to convert taxable sale of assets into tax exempt sale of shares through tax neutral reorganisations such as demergers. But with the authorities scrutinising such reorganisations and applying anti-abuse law provisions, Astrid Pieron of Mayer Brown offers advice on how taxpayers can avoid the attention of officials.

The Department of Finance recently released proposed amendments to Canada’s foreign affiliate regime including rules dealing with so-called upstream loans. Bruce Sinclair and Kirsten Kjellander of Blake, Cassels & Graydon explore implications of these proposals for multinational enterprises involved in the natural resource industry.

In transactions between related entities across jurisdictions, transfer pricing rules act to allocate profits and losses in a fair and economically justifiable manner to best reflect revenues and costs of each party to the transaction. Bruce Clements and Alan Clements of Clements Law Office discuss the factors in applying the comparability approach in the US and the UK.

Brazil does not follow OECD guidelines Experts are applying a new technique to avoid the application of the Brazilian resale price minus method.