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Rajendra Nayak Ganesh Pai The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) in the case of Sheraton International inc. vs. DDIT [2007] 293 ITR (AT) 68 examined the taxability of a foreign company engaged in the business of providing various services related to hotels. The taxpayer (US Co), a company incorporated in the US, entered into agreements with an Indian company (I Co) for providing services in the nature of publicity, advertisement, sales and reservation of rooms in the hotels of the I Co. It also permitted the I Co to use its brand name and trade mark as incidental to the main services provided. The I Co made a composite payment to the US Co at a percentage of total room sales and not with reference to any particular service. The issue before the ITAT was the taxability of the fees received by US Co from the provision of such services to the I Co. The US Co was a resident of USA within the meaning of article 4 of the double taxation avoidance agreement between India and USA (the treaty) and was eligible for the treaty benefits.

The high court in Mumbai has ruled that the Indian government can pursue its demand for capital gains tax (CGT) arising from Vodafone's purchase of a controlling stake in Hutch Essar in May. This could result in Vodafone paying up to $2 billion in taxes.

Peter Male Transfer Pricing Solutions, a UK-based boutique transfer pricing consultancy, has recruited Peter Male from Ernst & Young, where he spent 19 years. Recently, he was head of transfer pricing for the firm's Central and South regions before returning to the London transfer pricing team.

Edward Tanenbaum Industry focus approach to compliance The Large and Midsize Business Division (LMSB) of the IRS, which is responsible for examining businesses with assets of $10 million or more, has implemented an industry issue focus approach to compliance to improve consistency in the resolution of issues across industries. Compliance issues are identified by field agents through examinations, reviews of schedule M-3s and other sources. The issues are then prioritised and tiered. This strategy represents a shift towards centralisation of the resolution of issues that the IRS considers to be most prevalent and subject to the greatest compliance risk.

Tokyo The number of mutual agreement procedures (MAP) involving an advance pricing agreement (APA) in Japan has increased by 600% in the last decade.

In the 2007-2008 inter-professional agreement, it was decided to adopt a measure that would aim at compensating the impact of salary costs on enterprises' competitiveness.

Our cover story this month examines the vexed question of flat taxes. The merits and demerits of the arguments are set out clearly in a well argued piece by Catherine Snowdon. Emerging states have clearly benefited from the coherence and simplicity of the system though economists across the world are less convinced of its benefits for more complex economies.

Following the much publicised amnesty on offshore accounts where more than 62,000 people came forward with details, HM Revenue & Customs (HMRC) have now gone a stage further.

The Irish High Court recently delivered its judgement on a case which was brought to determine whether the Ireland–Italy double taxation agreement (DTA) included within its remit Irish capital gains tax (CGT).

In Germany the taxpayer is under a duty to disclose all relevant facts to the tax authorities in the course of the normal processes of assessing the tax due and then auditing the accounting records on which it is based. This duty is enhanced where foreign aspects come into play. Thus the taxpayer is required to gather the necessary details up front, rather than being allowed to wait until after the event. Nowhere is this more apparent – or acute – than in the field of transfer pricing. Latterly, the situation has grown in sensitivity with the inappropriately named "Profit Recording Order" setting out the transfer pricing documentation requirements in considerable detail, and with the finance ministry decree on the procedures to be followed in connection with transfer pricing reviews and negotiation with foreign taxing authorities.