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Under the imputational corporate tax credit system in force in Germany until 2001/02, the double taxation of corporate earnings was avoided by granting dividend recipients - corporations and individuals - a credit for the corporate income tax paid by the distributing corporation. The credit was, however, in general only available with respect to dividends paid and received by a German resident.

The judgment delivered by the European Court of Justice (ECJ) in the Kretztechnik AB vs Finanzamt Linz case is of importance to anyone engaged in value-added-tax-exempt financial transactions - issuing equity or debt for example. The case was directly concerned with value-added tax (VAT) incurred on professional fees related to the issue of shares by the taxpayer on the Frankfurt Stock Exchange. In that case, the Austrian authorities had refused to allow deductibility of VAT on these fees on the grounds that they related to an exempt supply.

The Legislative Decree dated May 27 2005, which is not yet published in the Italian official gazette as of June 30 2005 (the decree) finally implemented Council Directive 2003/49/EC of June 3 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different member states (the directive), whose term expired on January 1 2004.

Belgian value-added tax (VAT) law makes a distinction between "advertising or publicity" costs, (eligible for VAT recovery) and business entertainment costs.

All local and foreign multinational groups must comply with the transfer pricing rules established in article 38 of the Chilean Income Tax Law, which refers to the determination of arm's-length prices charged between related entities on the acquisition or supply of goods and/or services. Within the framework set out by a recent tax authority audit plan on additional tax, a local tax authority can request the filing of two sworn statements.

During the 1990s foreign investors looked to expand their businesses in Brazil in a number of key sectors of the economy. The main factors taken into consideration by foreign investors were, among others, the economic stabilization with reduced inflation rates, the opening of the Brazilian market, the attractive market conditions and the reduction of the Brazilian sovereign risk rates due to economic stabilization.

Under the Austrian participation exemption dividends received by an Austrian resident corporate shareholder from a domestic company are tax exempt irrespective of the percentage of the participation and of the holding period. In contrast, dividends from a foreign company are only tax exempt if the shareholder holds at least 10% in the share capital of a foreign company eligible for such exemption and if such participation is being held continuously for at least one year.

Michel Guilluy, Eric Centi and Vincent Marquis of PricewaterhouseCoopers, examines the interaction between the MFN clause and the fundamental freedoms in the EC Treaty

The tax and legal rulebook to facilitate cross-border mergers of companies within the EU is expanding all the time. However, Germany is one member state which still requires domestic implementation legislation, explains Jürgen Hartmann

Belgium's tax authorities have issued guidance on how they shall interpret the country's tax treaty with Hong Kong. The guidance discusses Hong Kong profit repatriation to Belgium, explain Kurt De Haen and Guy Ellis of PricewaterhouseCoopers