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The European Commission has published a proposal to simplify value-added tax (VAT) compliance for cross-border traders throughout the EU.

Kristian Jensen, the Danish minister of taxation, has published draft legislation to tighten the country's transfer- pricing regime. The stringent proposals, intended to comply with the EU principle of freedom of establishment, would introduce documentation requirements for domestic as well as cross-border transactions.

From January 1 2005 large companies with operations in Brazil will have to meet monthly instead of quarterly deadlines for filing their federal tax and contributions return. Brazil's Federal Revenue Department, announced on December 2 2004 that companies with annual gross revenues more than BRL80 million ($29 million) will be affected by the changes.

Michael Durst: Wants a strong global network Michael Durst, formerly of the US law firm King & Spalding, has rejoined PricewaterhouseCoopers' transfer-pricing practice. In his new position, Durst is advising clients in tax dispute resolution, international tax planning and controversy defence.

The Frankfurt tax practice of German law firm Haarmann Hemmelrath will be strengthened in January 2005 with the arrival of Joachim Krämer and Roderic Pagel, two international tax partners.

William Chip: Covington & Burling has a

A new internal study by the US Treasury Department has confirmed that Internal Revenue Service (IRS) agents are demanding transfer pricing documentation in many more audits. In January 2003 the IRS published an internal directive requiring its auditors to request transfer pricing documentation in all audits with international transactions. The new study compared audits before and after the directive. Before the directive, documentation was requested in 35% of the audits studied, afterwards the number rose to 55%.

In a decision that directly affects foreign corporations with US subsidiaries engaged in the solicitation of sales of tangible personal property in the US, the Pennsylvania Supreme Court in Schering-Plough Healthcare Products Sales Corp. v Commonwealth of Pennsylvania, confirmed that Pennsylvania was pre-empted pursuant to Public Law 86-272 (15 U.S.C section 381) from imposing its corporate net income tax on a company whose business activity in Pennsylvania was limited to the solicitation of sales of tangible personal property owned by its parent corporation.

Foreign multinationals should examine the recent corporate tax reform carefully for any impact on their US investments, warn PwC advisers in New York and Washington, DC