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Sean Foley The US Treasury Department announced that representatives of Belgium and the United States on November 27 2006, signed a new income tax treaty and protocol to replace the existing bilateral income tax treaty (concluded in 1970, amended in 1987).

In the Official Gazette No. 38.598 released on January 5 2007, two new agreements were announced with Korea and Austria respectively. Both aim to prevent fiscal evasion with respect to taxes on income and capitol.

Kevin Rowe Edward Tanenbaum Overview The IRS has recently issued proposed regulations under Code Section 362(e)(2) dealing with the loss duplication rules enacted as part of the American Jobs Creation Act of 2004.

The UK system for taxing dividends Where a UK-resident company receives dividends from a company that is also UK-resident, the recipient company is not liable to corporation tax in respect of those dividends. Where a UK-resident company receives dividends from a company resident outside the United Kingdom, it is liable to corporation tax on those dividends. The UK-resident recipient company is entitled to a tax credit either under the provisions of UK national law or a double taxation convention (if applicable). The national legislation provides that withholding taxes paid on such dividends may be offset against the corporation tax liability of the resident company receiving such dividends. Where the resident company controls 10% or more of the voting rights in the company making the distribution, relief is also granted for the underlying foreign corporation tax (corporation tax paid by the company making the distribution in its jurisdiction of residence) on the profits out of which the dividends were paid. Such relief is limited to the amount of corporation tax payable in the UK on the relevant income.

Francisco Lavandera On November 30 the Tax Fraud Prevention Law was published in the Spanish Official State Gazette, which introduces specific amendments to the laws governing the main taxes in the Spanish system. The law is aimed mainly at controlling and preventing tax fraud.

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.

Roberto del Toro Diana González On December 22 2006, Mexican Federal Congress approved the 2007 tax reform, which entered into force on January 1 2007. This reform reflects the purpose of increasing the tax collections; however, the number of taxpayers contributing to the revenues will remain largely the same.

Hans Olav Hemnes Hanne Skaarberg Holen The Supreme Court delivered judgement in more than 20 tax cases in 2006. The lot comprised a good spread in different areas, including income/corporate tax, inheritance tax, property tax, VAT, formal assessment issues as well as penalty taxes.

The Indian Supreme Court has said that the offshore supply of goods and services by foreign companies cannot be taxed in the same way as if they came from an Indian firm.

China's embrace of the free market masks government institutions that make life unique for the tax professional here. Claire Jones finds out what tax professionals need to know to get the most from a novel political and economic environment