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Bill increasing foreign tax credit On December 15 2006 the Chilean President sent to Parliament a Bill which aims, among other things, to increase the domestic foreign tax credit for certain inbound income from countries that have not subscribed to double tax conventions with Chile (hereinafter non-treaty countries). The Bill also extends the scope of income taxes that entitle a taxpayer to claim foreign tax credit in the cases of treaty countries; and eliminates formal requirements to be entitled to the aforementioned credit.

Nelio Weiss Philippe Jeffrey For a second consecutive year and with the objective to minimise the effect for exporting companies from the appreciation of the local currency in relation to foreign currencies (specifically the US dollar and the Euro) the Brazilian authorities issued on December 29 2006, Ordinance 425 and Normative Instruction 703. The directive amended the Brazilian transfer pricing legislation. As per the latter Ordinance and Normative Instruction, Brazilian exporting companies will be allowed to increase their export revenues for calendar year 2006 (for transfer pricing calculation purposes) using the ratio of 1.29. This exceptional measure will only apply for the fiscal year 2006. As mentioned, a similar measure was also adopted for fiscal year 2005, allowing the Brazilian exporting companies to increase their export revenues using then a ratio of 1.35.

Vispi Patel of RSM & Co describes the attitude of the Indian revenue authorities to transfer pricing audits and points out how international taxpayers could mitigate their risk

Sec 911 has changed the tax treatment of US expatriates. Edward Gibbons and Leann Balbona of KPMG in the US reveal that housing is only one area where expats and employers may have to rethink their assignment strategies

Higher interest deductions from intragroup funding structures could be available because of the UK tax authority's approach to audits, believes Shiv Mahalingham of Chiltern

The year ahead is set to be action packed for tax markets around the world. Catherine Snowdon finds out about the fiscal hopes and fears around the globe

Marc Gerson: Being in Congress was a valuable experience but I am focused now on Miller After two years as majority tax counsel to the US House of Representatives Committee on Ways and Means, Marc Gerson has rejoined Miller & Chevalier. He joins the Tax Department and the Tax Legislative Practice of the Government Affairs Department as a Member.

Julian Fortuna: Had a wonderful opportunity to come over After 11 years as vice president and general tax counsel to InterContinental Hotels Group (IHG), the world's largest hotel group, Julian Fortuna has become the first tax partner at Duane Morris' Atlanta office.

Type of deal Valuer Acquirer Target Adviser to acquirer (tax) Adviser to target (tax) Acquisition £267 million ($525 million) Blackstone (US) Tragus Group (UK) Simpson Thacher & Barlett (UK), DLA Piper (UK) Ashurst (Alexander Cox, UK) Acquisition €430 million ($557 million) Management buy-out backed by Sagard (France) and Ergon (Belgium) Aliplast Group (Belgium) Clifford Chance Ashurst Acquisition €122 million ($158 million) GE Real Estate Italia (Italy) Italian office properties in Milan and Rome Ashurst (Paola Flora, Italy) Acquisition €226 million ($293 million) Pamplona (UK) Johnson Matthey (ceramics division) (UK) Jones Day (UK) Herbert Smith (Michelle Williamson, UK) Acquisition £103 million ($203 million) BSkyB (UK) 365 Media (UK) Herbert Smith (UK) SJ Berwin (UK) Acquisition $1 billion Carlyle Group (US) Elkcorp (US) Debevoise & Plimpton (Peter Furci, Karl Lee, US) Wachtell Lipton Rosen & Katz (US) Acquisition undisclosed Carlyle Group (US) Atlas Roofing (US) Debevoise & Plimpton (Peter Furci, Karl Lee, US) Kirkpatrick & Lockhart Nicholson Graham (US) Acquisition $1.7 billion John H. Harland Company (US) M & F Worldwide (US) Cravath, Swaine & Moore (Stephen Gordon, Michael Breidenbach, US) Skadden, Arps, Slate, Meagher & Flom (Barnet Phillips, Ron Kovalsk, US) Acquisition £263 million ($517 million) Inchcape (UK) European Motor Holdings (UK) Slaughter and May (Dominic Robertson, UK) Freshfields Bruckhaus Deringer (UK) Acquisition $237 million Georgia-Pacific (US) five mills belonging to International Paper (US) Debevoise & Plimpton (Peter Furci, US) Acquisition C$1.25 billion ($1.07 billion) Nucor Corporation (US) Harris Steel (Canada) Stikeman Elliot (Canada) Goodmans (Maureen Berry, Canada) Acquisition $399 million Orascom Telecom Holding (Egypt) 7.91% stake in Orascom Telecom Algeria (Algeria) Gide Loyrette Nouel (Algeria) Allen & Overy (Dubai) Acquisition $2.35 billion Onex (Canada) Eastman Kodak (Health Group) (US) Kaye Scholer (US) Sullivan & Cromwell (US), Freshfields Bruckhaus Deringer (Europe) Merger $2.72 billion FairPoint (US) Verizon (Wireline businesses in Maine, New Hampshire, and Vermont) (US) Paul Hastings (US) Debevoise & Plimpton (Peter Furci, David Schnabel, Vadim Mahmoudov, Brooke Monahan McKeever, Gabriela Palmieri, US) Acquisition $4.8 billion General Electric (US) Smiths Aerospace (UK) Slaughter and May (Steve Edge, Gareth Miles, Dominic Robertson, UK) Allen & Overy (Brenda Coleman, UK) Acquisition £218 million ($429 million) Oak Hill Capital, GenNx360 Capital, and Knox Lawrence (US) Vertex Data Science (UK) Olswang (Stephen Hignett, Stephen Smith, UK) Slaughter and May (Graham Airs, Edward Denny, Timothy Woodthorpe, UK) Type of deal Value Issuer/Borrower Lead managers/ lenders Adviser to issuer/borrower (tax) Adviser to lead managers (tax) CDO €317 million ($410 million) Henderson Global Investors (collateral manager) (UK) Bank of America Securities (underwritter) (US) Ashurst (Ian Johnson, UK) Milbank Tweed Hadley & McCloy (UK) Notes issue €508 million ($658 million) Avoca CLO VI/ Avoca Capital Holdings (Ireland) Credit Suisse (Switzerland) Matheson Ormsby Prentice (Ireland) Ashurst (UK), McKee Nelson (US)

Peter Dachs In the absence of a double tax agreement, non-resident investors are subject to South African tax in respect of any South African-sourced income, or income deemed to be sourced from here.Because of this, foreign investors into South African funds (such as hedge funds, private equity funds) face an enquiry into whether the profits from such investments are derived from a South African source or deemed source.This is particularly relevant where the foreign investors have a direct exposure to the underlying assets, such as where the fund is a transparent entity such as a partnership.