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The Treasury Department and IRS have released temporary regulations (TD 9240) – and by cross-reference, proposed regulations (REG-106418-05) – modifying the rules for determining whether a controlled foreign corporation's (CFC's) distributive share of partnership income is excluded from foreign personal holding income (subpart F Income) under the active insurance business exception contained in Internal Revenue Code section 954(i). These temporary regulations modify a rule included in the so-called "Brown Group" regulations (as finalized in 2002) regarding the application of section 954(i), and specifically will affect CFCs that are qualified insurance companies that have an interest in a partnership, as well as the US shareholders of the CFCs.

According to the International Herald Tribune of February 14, the US tax authorities are offering law firms, accounting firms, banks and investment firms that put together aggressive tax schemes a chance to "come forward, pay penalties and turn over information" and avoid criminal prosecution

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Baker & McKenzie have hired three senior-level economists for its global transfer pricing practice and economics group in the US. Brian Cromwell, formerly of Ballentine Barbera, will become principal economist in the Palo Alto office. He has a particular focus on transfer pricing matters involving advance pricing agreements, audit defence, intangible property valuations, and global transfer pricing strategies. Phil Carmichael, formerly a managing director of KPMG's economics and valuation services practice in New York, joins Baker & McKenzie's economics group in the same city as a director, as does Michelle Martinez in Chicago. Martinez was KPMG in Chicago's managing director for major transfer pricing projects involving large US, European and Asian multinational clients.

The tax reform plan for 2006 includes the following treatments of corporate reorganizations and M&A.

The German thin-capitalization rules include a provision (section 8a (6) KStG – Corporate Income Tax Law) re-characterizing the interest expense associated with intra-group share acquisitions as a constructive dividend if the acquisition is financed using intercompany loans or back-to-back financing arrangements (so-called "tainted loans"). Interest re-characterized as a constructive dividend is effectively non-deductible. However, the provision's broad language leaves many questions unanswered. In particular, the types of acquisitions to which it is applicable are unclear – both with respect to timing and factual situations.

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.