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By Barbara Brauchli Rohrer and Nicolas Scholl, PricewaterhouseCoopers

By Terry O'Driscoll and Peter Vale, PricewaterhouseCoopers

The Netherlands has lost some ground, over the past few years, in the international competition with other countries with regard to investment funds. To reverse this trend the council of ministers has recently agreed to the introduction of a new regime for investment funds.

By Tobias Lintvelt and Koichi Sekiya, Shin Nihon Ernst & Young

By Heini Rüdisühli and Jean-Blaise Eckert, Lenz & Staehelin

On February 28 2006 a new tax treaty (Mexico's 31st) between Mexico and China was published in the Official Gazette and will became effective from January 1 2007.

Observers of the Middle East region might have noticed the recent impetus by the Saudi Arabian government to improve its network of tax treaties. Saudi Arabia for a long time only had one tax treaty in place, with France. Over the last year, there has been a relative flurry of treaty negotiations leading to the recent signing of tax treaties with, amongst others, Russia, China, Malaysia, India, Pakistan and Italy.

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.

Non-Canadian corporations with a Canadian shareholder base planning to spin-off the shares of a non-Canadian subsidiary might wish to consider taking steps to provide their Canadian shareholders with the opportunity to elect to defer tax on the spin-off.

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.