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  • Suppliers to MG Rover have agreed a tax break on £120 million ($227 million) of components delivered to the failed UK carmaker. HM Revenue & Customs agreed to defer value-added tax charges on 300 of the car company's suppliers after MG Rover collapsed in April.
  • The governments of the US and Bulgaria announced on April 21 that they plan to begin negotiating a bilateral income tax treaty. The first round of negotiations is scheduled to begin later this year. If agreed, the treaty would be the first ever between the two countries.
  • The UK government launched HM Revenue & Customs (HMRC), the new tax body formed after the merger of the old Inland Revenue and Customs & Excise on April 18 2005.
  • The government of the Netherlands has proposed sweeping corporate tax changes that would lower the country's tax rate and align its international tax rules more closely with EU law. The proposals, released on April 29, would reduce the corporate tax rate from 31.5% to 26.9% and extend loss-relief rules to countries outside the Netherlands but within the EU.
  • Beth Williams, a senior tax controversy and transfer pricing specialist, joined Baker & McKenzie's Palo Alto office on April 18.
  • From January 1 2005 the Swiss government has introduced changes to the payment of withholding tax on dividends. Now a Swiss corporation will not be obliged to deduct and pay to the tax authority the whole of the withholding tax of 35%.
  • US taxpayers with Luxembourg operations won an important victory when the US Federal Court of Claims ruled in favour of a claim for foreign tax credits involving a check-the-box structure. The ruling effectively allows the US taxpayer to claim US foreign tax credits from Luxembourg income tax on a current basis, while deferring US recognition of the Luxembourg income.
  • The American Jobs Creation Act of 2004 added Internal Revenue Code section 7874 to the code to combat the perceived abuse of inversions of US corporations into foreign corporations. The provision is overly broad and in its current form may result in significant adverse income tax consequences to many internal restructurings within an affiliated group of corporations.
  • Robert MacDonald: Switched firms after listening to a headhunter Gide Loyrette Nouel, a French international law firm, has started a US tax practice with the hire of Robert MacDonald in its New York office.
  • Under the double tax treaty with Cyprus, investors can enjoy a 5% withholding tax rate on dividends distributed by a Russian subsidiary, rather than the regular 15% rate. Therefore, using Cypriot holding companies is one of the most typical vehicles to structure inbound investments in Russia.