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Edward Tanenbaum Diana Wessells Section 7874 applies if, pursuant to a plan, (1) a foreign corporation acquires, directly or indirectly, substantially all of the properties held directly or indirectly by a US corporation; (2) the foreign acquiring corporation or any affiliated corporation (based on greater than 50% common ownership) does not have substantial business activities in the country in which the foreign acquiring corporation is organised; and (3) immediately after the transaction, former shareholders of the US corporation own at least 60% of the stock (by vote or value) of the foreign corporation by reason of holding stock in the domestic corporation. The stock ownership test disregards stock held by members of the expanded affiliated group (EAG) that includes the foreign acquiring corporation.

Henry An David Jin-Young Lee On May 1, the National Tax Service (NTS) announ-ced the establishment of the taxpayer protection committee (TPC) to review taxpayer issues and recommend areas for improvement. The TPC will also be responsible for approving tax auditor requests for extending the duration or the scope of a tax audit.

By Catherine Snowdon, Americas correspondent

The transfer pricing regime is evolving rapidly and is soon to spread into Central American countries, say Ronald Evans and Gustavo Sánchez of Baker & McKenzie

Tax legislation is soon to be amended to include greater transfer pricing detail, say Miguel Zamora and Ana Paula Güitrón of Baker & Mckenzie

Transfer pricing rules in Brazil have evolved to the point where they seem ready to be brought in line with those of the OECD, say Simone Dias Musa and Clarissa Machado of Baker & McKenzie

Transfer pricing has become one of the most important tax issues. On one hand, it represents an effective tool for governments to protect their tax base from cross-border transactions carried out by multinational enterprises, in order to leave a fair taxable basis according to a company's functions, risks and assets. On the other, it is a key management issue for companies because adjustments determined by tax authorities, coupled with potential penalties and double taxation implications, might affect their financial performance and global tax burden.

Transfer pricing rules have come a long way since their introduction in 1998 and are ready to fall in line with international standards, say Augusto Martín Camarero and Armando Cabrera of Baker & Mckenzie

Rüdiger Loitz, Tobias Taetzner and Tom Weber explain how finance can help improve tax effectiveness

The world of corporate taxes is changing and there is no going back, says John Clymer