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The rules for the UK taxation of securitisation companies are now being used by structures specifically created, or suffering, during the economic downturn, explain Sean Finn and Graham Samuel-Gibbon of Latham & Watkins

Rajendra Nayak Ganesh Pai The Pune Income Tax Appellate Tribunal (ITAT) in the case of Epcos AG (2008-TIOL-47-ITAT-PUNE) recently examined whether the activities of Indian subsidiaries constituted a permanent establishment (PE) for its parent in India. The taxpayer, a company incorporated in Germany, was engaged in the business of designing, manufacturing and marketing electronic components. It had two Indian subsidiaries which were engaged in the manufacture and sale of electronic components to customers in India. The taxpayer provided certain services to its Indian subsidiaries through its central marketing and IT support teams from outside India.

Alke Schröder As a first reaction to the financial crisis in 2008 Germany enacted the Finanzmarktstabilisierungs-fondsgesetz (FMStFG) with effect from October 18 2008 to establish a state fund to guarantee bank deposits and other liabilities and so stabilise the German financial market. However, banks taking advantage of the umbrella have to accept various conditions, including the state as a shareholder. The share transfer or capital increase which this involves could lead to curtailment of the loss carry-forwards of the bank, or of one of its subsidiaries, under sec. 8c of the Corporation Tax Act, which curtails the loss carry forward on transfer of more than 25% of the share capital to a single immediate or ultimate shareholder. The FMStFG exempts German banks from this loss relief curtailment both on the original state acquisition and on the subsequent reprivatisation.

Marius Ionescu Lucian Barbu The end of 2008 and the beginning of 2009 brought significant changes to the Romanian tax legislation, mainly aimed at counterbalancing the downgrade of the Romanian economy, especially as regards the capital market, banking and real estate sector.

Amendments to the Polish tax regulations relating to transfer pricing came into force on January 1 2009. Article 11 of the corporate income tax law was supplemented with regulations, which allow the taxpayer to apply for a correction to its taxable profit in the situation when such profit was already taxed by a foreign tax administration relevant to the taxpayer's related customer (corresponding adjustment).

Stephen Nelson The newly-revised value-added tax (VAT) provisional regulations and their implementation rules abolished both VAT refunds for foreign invested enterprises (FIE) purchasing domestically manufactured equipment and VAT exemptions for imported equipment. Grandfathering rules were subsequently issued in late December 2008.

Ian Farmer On December 4 2008, Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2008 (the TOFA Bill) was introduced into Australian parliament. This Bill contains the taxation of financial arrangements (TOFA) stage three and four measures, which will have a broad impact on all industries, beyond just the banks and financial institutions.

By Joanna Faith

Jordi Dominguez Jordi Dominguez, a partner of Garrigues in Madrid, is leaving to join Latham & Watkins as a partner in the same city. He has worked on complex tax planning and structuring matters in cross-border M&A, restructuring transactions and insolvency proceedings, and on the tax aspects of investing in Latin America.

Dennis Turovets Dennis Turovets will chair Magisters' tax practice in its new office in Minsk. The office opened on February 4 after the firm merged with BelJurbureau, a Belarus practice, in December. Three other professionals will work Turovets, who is also the managing partner of the office, in the tax practice.