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Sempra Metals won a landmark victory in the UK House of Lords in July. Clive Greenwood, joint head of partnerships and LLPs at Lewis Silkin in London, explains how a revenue interpretation was contrary to European law

Christoph Schärer, in Zurich, and Harvey Mayne, in Frankfurt, from PricewaterhouseCoopers explains why VAT risk is a major threat to businesses in the EU

US treasury department The US tax authorities have released the list of issues they hope to produce guidance on by June 2008. The priority guidance plan released by the IRS and the Treasury department's office of tax policy on August 14 contains 303 projects.

Seyang Building

Sue Bonney KPMG has announced that the head of its UK tax practice, Sue Bonney, will be in charge of tax for its European firm. KPMG is in the process of merging its British, German and Swiss operations. The Dutch firm is shortly to vote on its inclusion.

Sean Foley Recently, the IRS Large and Midsize Business Division (LMSB) issued a new industry directive (LMSB-04-0407-035) focusing increased audit efforts on certain international hybrid instrument transactions. International hybrid instrument transactions are cross-border financing arrangements in which the taxpayer takes different positions in its treatment of the transaction as debt or equity for US and foreign tax purposes.

Manuel Bouzas Transfer pricing is an issue of growing importance in the international arena, owing to the globalisation of the economy and the absence of fiscal harmonisation. The OECD is well aware of this and has concentrated much effort on establishing a series of criteria which will enable states to approach the problem in a manner which is as uniform as possible, fostering cooperation between the tax authorities of the different states in areas such as information exchange and joint inspection procedures.

Suzanne Boers When employees are temporarily hired out to work cross border at a foreign affiliated company of their own employer, the question can be raised as to which of the two states involved may levy tax on the wages. Double tax conventions contain several criteria and conditions in order to divide the taxing powers on income elements such as wages between the contracting states.

Roberto del Toro Salvador Esquivel The tax treaty between Mexico and the Slovak Republic was signed on May 13 2006 and approved on July 13 2007. The treaty will enter into force 60 days after each country has notified the other of the completion of its ratification. All treaty provisions will apply as from January 1 of the calendar year following its entry in force.

Akio Takisaki The rules limiting the tax deductibility of director's compensation payments, which were substantially revised in the 2006 tax reform, have been further amended in the 2007 tax reform. The new provisions are applied in the taxable year starting on or after April 1 2007.