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Rajendra Nayak Ganesh Pai The Authority for Advance Rulings (AAR), in the case of K.T. Corporation (2009-TIOL-12-ARA-IT) and the Income-tax Appellate Tribunal (ITAT) in the case of Jebon Corporation (2009-TIOL-323-ITAT-Bang) have both recently examined whether the activities of a liaison office in India would constitute a permanent establishment (PE) under the provisions of the tax treaty between India and Korea. Under the provisions of the tax treaty, a PE is defined as not to include a fixed place of business engaged in carrying out preparatory or auxiliary activities.

Janne Juusela The Supreme Administrative Court ruled in its recent decision (KHO 64/2009) that a holding company established for the purpose of acquiring an industrial company, carrying no active business activities and having no employees was not deemed as a company carrying on private equity activities for Finnish tax purposes. This meant that the holding company was not entitled to deduct liquidation loss accrued from the liquidation of the acquired company. The fact that the company was established for the purpose of acquiring the industrial company and subsequent utilisation of the liquidation loss was taken into account in the ruling.

Sophie Stylianou Cyprus is considered a popular location for companies engaged in financing activities. No direct thin capitalisation rules are applicable, such as debt-to-equity requirements. Equally, from a transfer pricing perspective, as in cases of back-to-back financing transactions, the arm's length principle is applicable in Cyprus.

Given the economic recession and in trying to mitigate the impact in the Chilean market, the government approved a bill – law 20.326 - in January 2009 which included some tax incentives. The bill proposes a transitory elimination of stamp tax, a temporary reduction of provisional monthly prepayment (PMP) rate, a regime to promote employee training and an advanced refund of the surtax.

Ian Farmer On June 5 2009 Treasury released a consultation paper stating that new arrangements regarding employee share schemes would commence on July 1 2009 – providing more certainty for employers and their employees.

Mark Lawson, head of tax for Northern Europe for CIBA, a global chemicals company, tells Georgiana Head that the key to managing tax risk is dealing with problems before they become issues

By David Stevenson

Boey Yoke Ping, Joseph Lam and Kurt De Haen of the Baker Tilly international tax network explain how taxpayers can use best-practice experiences in east-west tax planning opportunities.

By International Tax Review

By David Stevenson