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Mikhail Filinov Ilarion Lemetyuynen The current Russian tax system does not envisage a participation exemption regime for dividends received and realized capital gains. Dividends received from Russian companies are taxed at 9%, with a tax credit for underlying tax on dividends so that total tax applicable to dividends remains at the level of 9% irrespective of the number of Russian holdings in the ownership chain. Dividends received from foreign companies are subject to 15% tax with a credit for foreign tax withheld if an applicable double tax treaty so provides. To improve the image of Russia as a holding company jurisdiction for domestic businesses and avoid stripping of tax revenues from Russia, the legislators introduced elements of favourable holding regimes to Russian tax legislation and submitted a draft law to the parliament for this consideration.

Samantha Nonnenkamp Specialized Investment Funds (SIFs) New draft law of specialized investment funds (SIFs) replaces the law on institutional investor funds to introduce more flexibility and extend the concept of eligible investors to professional investors and well-informed investors.

Akio Takisaki The Japanese tax system basically provides for two different kinds of tax credit: direct foreign tax credit and indirect foreign tax credit.

Welcome to the special feature on Italy in the November issue of International Tax Review.

Horacio Dinice and Manuel Diskenstein of Deloitte explain how the burden of gathering transfer-pricing information falls squarely on the taxpayer's shoulders

Lorenz Bernhardt Jobst Wilmanns Following the transfer pricing documentation rules in 2005 and the new arrangements for advance pricing agreements this October, the finance ministry has turned its attention to examining the substance of specific transactions. The first item on the agenda is the transfer of functions abroad, prompted by fears, real or imagined, of multinationals shifting as much as possible of their business to low-cost, low-tax countries as a deliberate policy of avoidance.

Peter Cussons On September 12, the Grand Chamber of the European Court of Justice handed down its judgment in the Cadbury Schweppes Plc Controlled Foreign Companies (CFC) case. The ECJ has remitted to the UK referring court (the Special Commissioners) the question as to whether the UK motive test can be interpreted so that the UK CFC charge on the UK immediate parent company of an EU (non-UK) lowly taxed (less than 75% of the UK rate ) subsidiary only applies in the case of "wholly artificial arrangements".

Each year, the third Tuesday of September, is Budget Day in the Netherlands. On this year's Budget Day, September 19, the 2007 Tax Package was published. The majority of the proposals included in the 2007 Tax Package will take effect from January 1 2007.

An unexpected verdict on Italy's IRAP tax and a damaging second opinion for the German finance ministry made October a critical month for tax decisions at the European Court of Justice (ECJ).

KPMG member firms in Germany and the UK have announced a plan to merge to form a single entity, KPMG Europe LLP. Meanwhile, Deloitte has also announced a merger between its UK and Swiss member firms. While the two mergers are unrelated they do hint at a developing trend towards pooling tax resources in Europe.