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Manuel Sainz Orantes and Alejandro Torres Rivero of Chevez, Ruiz, Zamarripa y Cia discuss how tax litigation has changed in Mexico, noting that the tax authorities are complying more with the law. However, recent Supreme Court judgments have not always abided by legal provisions

The District Court of the Hague has ruled, in a transfer pricing dispute, that the profits of an Irish reinsurance company are considered taxable income for its Dutch shareholder. Eduard Sporken and Dirk Brouwers of KPMG Meijburg & Co discuss the case and its implications.

The OECD project on the transfer pricing aspects of business restructuring has clarified a lot of the issues around the topic since it began in 2005, but uncertainties still remain, the annual congress of the International Fiscal Association (IFA) was told on Monday.

Paul Smith and Wendy Nicholls of Grant Thornton UK welcome the new patent box proposals but believe the take-up will be small because of the restriction to patents and the highly complicated calculation of patent box profits.

The Canada Revenue Agency (CRA) audits large corporate taxpayers on a regular basis. To improve efficiencies and cash recoveries, CRA is moving to a risk-based assessment approach to auditing such taxpayers. Over the next five years, corporate taxpayers will be assessed as low, medium and high risk, based on a series of factors. The frequency and intensity of the audit processes will vary directly with the risk ascribed to the particular taxpayer. Consequently, large corporations which now face consistent audit scrutiny on domestic and cross-border tax issues may find that CRA audit work abates or becomes more focused on specific areas in which significant tax liabilities may arise. Two areas of continuing review involve transfer pricing and aggressive tax planning. CRA regards the latter term as one referring to arrangements which comply with the letter but not the spirit of the statutory provisions that give rise to tax benefits.

Under Brazil's federal constitution of 1988, the states of the federation and the federal district are entitled to establish tax on the "circulation of merchandise, on interstate and inter-municipal transportation services, and on communication services". The states' powers over this value-added tax, or Imposto sobre Operações relativas à Circulação de Mercadorias e Prestação de Serviços de Transporte Interestadual e Intermunicipal e de Comunicação (ICMS), are not unlimited, however. One limitation is found in article 155 §2 (XII) (g), which provides that a specific type of federal legislation known as a complementary law is required to grant ICMS exemptions and other benefits.

Julie Zhang JSM Beijing Representative Office

Miguel Lorán Freshfields Bruckhaus Deringer

Datuk D P Naban

Laurent Borey Mayer Brown