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Article 45 section 2 of the Belgian value-added tax code has stipulated for many years that input VAT on cars is restricted to 50%. Only in a very limited number of cases will full VAT deductibility be allowed, for example, for car leasing or car selling.

The Tax Laws Amendment (Loss Recoupment Rules and Other Measures) Act 2005 received Royal Assent on December 14 2005. Australian corporate tax entities which derive foreign income and distribute it directly or indirectly to non-resident shareholders need to consider whether dividends paid on or after December 14 2005 should be declared to be conduit foreign income (CFI) under the newly enacted CFI rules.

Welcome decisions from the Belgian Ruling Commission provide guidance on how to approach transparency for Belgian tax purposes believe Kurt De Haen and Frederique Bearzatto of PricewaterhouseCoopers

Steven Herring of RSM Nelson Wheeler (Thailand) outlines some interesting differences in the tax issues investors face when making a share or asset purchase in Singapore, Thailand, Malaysia and Vietnam

Final withholding tax on interest income introduced The Luxembourg Law of December 23 2005 introduces a final withholding tax on interest income for individuals. According to the law, any Luxembourg paying agent that pays interest to a resident beneficial owner must apply a final withholding tax of 10%. The withholding is final in the sense that no further tax is payable on the income, the interest is not required to be reported in the taxpayer's tax return and it is not taken into account when calculating the average rates of tax on the income.

According to a decision of the French Constitutional Court on December 29 2005 (which confirms the terms of the High Court decision of June 29 2005), value-added tax (VAT) was included in the motorway tolls paid during the years 1996 to 2000.

On December 29 2005, the finance minister issued Ordinance 436 and the Normative Instruction 602, which amended Brazilian transfer pricing legislation, to minimize the effects for Brazilian exporting companies of the appreciation of the local currency in relation to foreign currencies (more specifically the dollar and the euro), Since January 1 2005, the Brazilian currency (real) has gone from 2.7 per dollar to about 2.2 per dollar at the end of December 2005, a currency appreciation of more than 20%. As per the ordinance and normative instruction, Brazilian exporting companies will be allowed to increase their export revenues for calendar year 2005 (for transfer pricing calculation purposes) using the ratio of 1.35. This exceptional measure will only apply for the fiscal year 2005.

On November 23 2005, the federal minister of finance announced income tax measures intended to help equalize the income tax treatment of dividends from corporations and distributions from income funds. Income funds are an increasingly common business structure in Canada for operating businesses involving public entities which are flow-through entities for tax purposes.

The competent authorities of the US and Mexico signed a mutual agreement on August 26 2005 regarding the treatment of fiscally transparent entities under the US-Mexico Income Tax Treaty.

Throughout 2005 Ireland continued to enjoy record levels of growth (4.6% GDP), with low unemployment. The tax system in Ireland remains a vital component of Ireland's economic success story and an important reason why it remains a destination of choice for inward investment into Europe. The corporation tax rate is 12.5% on trading income (one of the lowest in the EU), and there is an accessible and responsive regulatory touch in the tax arena.