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In the Marks & Spencer case (C-446/03) the ECJ held that if an EU member state allows a parent company to deduct losses of domestic subsidiaries then a rule which generally prevents the deduction of losses incurred by a foreign (non-resident) subsidiary is a restriction of the freedom of establishment and an infringement on articles 43 and 48 of the EC Treaty. Such restriction might be justified if the non-resident subsidiary (or a third party) has the possibility to claim relief with regard to the losses in the other country. They can do this, for example, by applying the loss against profits of prior periods by way of a loss carry-back, by carrying the loss forward to offset against future income or by transferring the loss to a third party.

According to the Chilean IRS understanding, a regional presidency does not constitute a legal entity but a group of executives and regional directors who carry out their functions under a subordination liaison with a foreign company.

The Tax Amendment Act 2005 (Abgabenänderungsgesetz 2005), which came into effect in January 2006, has brought about several changes in the Austrian income tax system. Some of them are highlighted below.

Legislation providing a foreign income exemption to temporary residents of Australia was introduced into federal parliament on February 16 2006. The exemption is proposed to apply generally for income years beginning on or after the July 1 following the date of royal assent, except for the interest withholding tax exemption which is proposed to apply from the date of royal assent. The start date for the general measures is therefore likely to be July 1 2006, if royal assent is obtained before that date.

The Argentine tax authorities (AFIP) have been focusing, over the past few years, on the deduction of interest associated with loans granted by foreign lenders under certain conditions. Reasonably, the concern of the AFIP grows when it comes to interest and other financial charges stemming from loans received by local taxpayers from foreign related parties.

A recent case has made clear the risks for taxpayers in the Netherlands if they lack documentary evidence of the economic substance of intercompany transactions, warn Eduard Sporken and Hayden Aalvik of KPMG Meijburg & Co

China will enact a law during the present session of the National People's Congress to unify foreign and domestic corporate tax rates, according to Jiang Enzhu, a Congress spokesman.

The UK chancellor of the exchequer can no longer excite or surprise the country's multinational taxpayers with his annual budget statement. It is almost as if he does not want to.

Nick Sherwin will be the head of Clifford Chance's tax, pensions and employment group in London from April 1. Sherwin has been a partner of the firm since 1993 and was previously head of the pensions group.

Catherine Brayley joined Bennett Jones' Toronto practice on March 22. Brayley deals with tax aspects of M&A, trusts and compliance issues as well as doing tax planning work for Canadian companies. Brayley is a member of the Ontario, and Newfoundland and Labrador bars.