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Contrary to our weekly e-mail of May 15, Denis Weber has not left the partnership of Loyens & Loeff to become professor of European corporate tax at the University of Amsterdam. He will combine both roles

Matthew Saronson, a specialist in private equity fund and cross-border taxation, will become a partner on 1 July 2006

The Dutch parliament received a bill proposing the deduction of 3.9 percentage points from the present corporate tax rate on May 24. If passed, the government would implement the deduction in 2007

Vivendi, the French media and telecoms company, said it had resolved its dispute with the US Internal Revenue Services (IRS) on June 1. The IRS had wanted $1.5 billion from Vivendi but the company will now only pay $686 million. The dispute was over DuPont shares, which Vivendi acquired when it bought Seagram in 2000

László Kovács, the member of the European Commission responsible for taxation, said member states need to make "a more common and coordinated approach at EU level" to combat tax fraud, as he launched a debate to combat the problem. Analysts think that tax fraud costs about €200 billion ($259 billion) to €250 billion in lost revenue, up to 2.5% of the total EU budget. Kovács is particularly concerned about VAT fraud, which alone accounts for about €60 billion. "The Commission proposes a new Community approach to administrative cooperation with third countries and is prepared to engage in a broad discussion on the need to modify VAT systems, " according to the statement launching the debate.

"The progress of the European Commission's Common Consolidated Corporate Tax Base initiative depends a lot on the German presidency of the EU in the first half of 2007," said a Commission official at a conference on corporate tax strategy in Barcelona on May 31. "If there is no agreement then the initiative may be stalled for some years," added the official, who emphasized that his was a personal view and not an official Commission position. He said if the timetable for a legislative proposal on the CCCTB by 2008 is to be met, drafting would need to begin in mid-2007

On April 27 2006 ECJ Advocate General Geelhoed issued his opinion in Denkavit International BV and Denkavit France SARL (case 170/05). He states that the withholding tax that France applied to outbound dividends whereas domestic distributions would be almost totally exempt is in breach of article 43 of the EC Treaty.

The Indian Authority for Advance Ruling (AAR) in the case of Morgan Stanley & Co v DIT recently examined whether a US company had a permanent establishment (PE) in India under the India-USA tax treaty (the treaty) on account of outsourcing certain services to its affiliate subsidiary in India and from deputation of personnel to the subsidiary. The personnel who were to be deputed to India were to be engaged either for providing stewardship services to the Indian company or were to be seconded to work under the control of the Indian company.

The Brazilian tax authorities issued on March 20 2006 the Interpretation Declaratory Act number 4 (ADI 4) (which is an official interpretation from the Brazilian tax authorities), setting out their understanding in connection with payments of dividends, royalties and technical service fees made under the Brazil-Spain Convention for the Avoidance of Double Taxation ( the tax treaty).

Several interesting court decisions regarding the taxation of corporations were issued recently. Some of them are highlighted below.