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Ian Farmer On October 1 2010, the Policy Transition Group (PTG), formed to advise on the technical design of the proposed minerals resource rent tax (MRRT) and expanded petroleum resource rent tax (PRRT) (collectively the resource taxes), released an Issues Paper as the first step the consultation process for the design and implementation of the proposed resource taxes which will apply to all Australian iron ore, coal and oil and gas projects from July 1 2010.

Janne Juusela The taxation working group, appointed by the Ministry of Finance and led by Mr Hetemäki, has in its intermediate report (35/2010) proposed key changes to taxation. The main themes of the intermediate report are widening the tax base, lightening the taxation of work and shift of focus from direct taxes to consumption taxes. The focus of income tax is proposed to be slightly shifted from taxation of corporate earnings to taxation of personal capital income. The key points of the working group report are presented in brief in the following.

Bill Maclagan Under the Canadian taxation system, corporations are taxed on a separate entity basis. Each corporation must file its own tax return declaring its own loss or income. Losses in one corporate entity within a related group may not be used to offset positive income in another entity. This can create significant economic inefficiencies and barriers to growth especially when separate entities are required, or are desirable, for commercial and liability reasons. Canada is the only G7 country that does not offer group consolidation and two-thirds of OECD member countries offer some sort of consolidation.

Last month President Barack Obama continued his push for corporate tax cuts. Erin Kelechava discusses the plans and discovers that a number of tax loopholes will be closed to fund the cuts.

Edward Tanenbaum Tola Ozim In Notice 2010-60, the IRS unveiled initial guidance on the Foreign Account Tax Compliance Act (FATCA) provisions of the Hiring Incentives to Restore Employment Act. The FATCA provisions are designed to detect US persons who may be evading US tax by holding income-producing assets through accounts at foreign financial institutions (FFIs) or through other foreign entities (non-financial foreign entities, or NFFEs). The FATCA provisions are generally effective for payments made after December 31 2012. More comprehensive guidance is anticipated before the effective date of the FATCA provisions.

Slobodan Mihajlovic Serbian lawmakers recently adopted several laws as well as amending to the tax proceedings and administration laws. The main reason for making these amendments is to comply with the law on minor offences and the law on the organisation of courts, as well as fine tuning the tax system, especially in the area of the settlement of tax obligations as well as defining the earnings of local municipalities.

As trade barriers are removed, the mobility of people and the access to information are ever increasing which is why the need for greater transparency and the requirement for exchange of information has been emphasised by the OECD through various initiatives. Mauritius has not remained complacent as it has developed its own model of exchange of information agreement as well as embedding an exchange of information article in most, if not all, of tax treaties that it has signed and ratified.

Carolina Lastra Natalia Núñez The Chilean government has proposed financing projects to reconstruct the damages caused by the February 27 earthquake, including a new mining royalty legislative action which was approved by Congress on October 13 2010. The Bill contains amendments to the specific tax on mining activities (STMA or royalty).

Bob van der Made The European Commission was expected to issue a new comprehensive strategic policy paper prepared by DG Markt on October 12 2010, however, this was postponed once more, this time until October 27 2010. The paper is the Commission's belated response to the Monti report presented to European Commission President Barroso in May 2010 and named after former EU Commissioner Mario Monti. The report contains recommendations for re-launching Europe's single market as a key strategic objective of the Commission. In the domain of (direct) taxation, a remaining symbol of state sovereignty within Europe's common market, the Monti report calls for the elimination of remaining cross-border tax barriers, binding dispute settlement rules for double taxation, a review of the EU's savings directive, work towards a common definition of the corporate tax bases and move forward with the work of the code of conduct group on business taxation, as well as revamping the EU Tax Policy Group. This was a political forum for high-level strategic discussions on tax policy composed of personal representatives of EU member state finance ministers and members of the European Commission. This group was first established in 1996 by Monti, then the EU tax commissioner and became dormant under Laszlo Kovács, his successor.

Sead Dado Salkovic Many companies or individuals often hire nonresidents to perform different tasks on behalf of their Montenegrin clients. Occasionally, foreigners are paid certain amounts as a consideration for transfer of right for using artistic, literary or scientific work including cinematographic films or radio and television broadcasting. Likewise, it includes consideration for utilisation of patent, trade mark, design, model and other intellectual rights. Therefore, it is essential to explain and clarify taxes imposed on payments to non-resident of income earned by these circumstances from the Montenegrin tax prospective.