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The new Company Law, which includes many drastic and significant changes in corporate legal treatments, will be effective from May 1 2006. The tax reform plan for 2006 also includes the following changes related to the new Company Law.

Ireland is working on a number of double tax agreements, to further enhance its tax attractiveness.

On February 16 the Brazilian authorities issued Provisional Measure 281 (PM 281), which granted specific tax-breaks for foreign investors in the Brazilian financial market. The rules set forth by PM 281 can be summarized as follows.

Referring to the ECJ case C-378/02 of June 2 2005 (Waterschap Zeeuws Vlaanderen), the Belgian VAT authorities has revised its position regarding the recovery of input value-added tax (VAT) incurred on capital goods that were purchased by a VAT taxpayer in his former capacity of non-taxpayer (Administrative Decision ET 110.412 of December 20 2005).

It has been more than a decade since the last major tax reform China implemented in the 1994. China's fast economic developments as well as its accession into WTO in 2001 called for a new round of reform. In fact, the relevant authority has long been preparing for the changes and in the recent years, government seems trying to press it ahead.

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.