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On September 19 2004, the ruler of Dubai enacted the laws of the Dubai International Financial Centre (DIFC), a recent addition to the several free-trade zones already existing in the UAE. The DIFC aims to benefit the region as a whole by acting as a catalyst for the region's economic development in the same way that similar centres in the US and Hong Kong have contributed to their respective regional development.

Dividends are generally exempt from income tax in the hands of the recipient shareholder in South Africa and there is no withholding tax on dividends. The tax authorities, however, tax dividends in another way, in the form of secondary tax on companies (STC). Subject to a number of exceptions and exemptions, STC is payable by a South African-resident company declaring dividends at the rate of 12.5% of the gross dividend declared. Secondary tax on companies is a direct tax on the company declaring the dividends, although indirectly borne by the shareholders, as they naturally get lower dividends after the STC.

At the heart of discussions within the EU about excessive transfer-pricing documentation requirements being imposed on European multinational enterprises (MNEs), in recent times there has been an increase within the member states of reporting obligations set forth for regulatory purposes, which also include information among related parties.

In the midst of campaigning for re-election, President Bush signed the American Jobs Creation Act on October 22 2004 to end the five-year trade row with the EU over the foreign sales corporation (FSC) and extra-territorial income (ETI) schemes.

Eric Overman, a former member of Deloitte's New York tax practice, has moved to US law firm Pillsbury Winthrop. Overman advises on the tax aspects of asset finance in the manufacturing, mining, telecommunications, real estate and financial services industries. He joined Pillsbury Winthrop's Orange County, California, office on October 10 2004.

The new UK tax disclosure rules, which oblige promoters and in some cases users of tax planning arrangements involving financial products or related to employment to notify details of the arrangements to the Inland Revenue, came into effect on September 30 2004. The notification must include an explanation of each element of the arrangements, its expected tax effect and its legal basis.

The Ministry of National Economy is working on a new income tax law to replace the current legislation, originally issued in 1981. Over the years, amendments have been made to this law through Ministerial Decisions and Royal Decrees. The new law is intended to consolidate the existing legislations, simplify the tax procedures and assist in speedy completion of tax assessments.

Hendrik Blankenstein, formerly international tax counsel for Nestlé, a Swiss food company, started in the Zurich office of Transfer Pricing Associates on November 1 2004. Blankenstein was responsible at Nestlé for issues such as the tax aspects of global acquisitions and supply chain restructuring, for businesses in the Americas and Europe.

Koen van't Hek, who left Ernst & Young for the international law firm Baker & McKenzie in July 2004, has rejoined the big-four firm. The u-turn comes after the departure of 10 other Ernst & Young tax partners to Baker & McKenzie, many of them transfer-pricing specialists. Koen van't Hek specializes in international tax.

Revenue Ruling 2004-83 holds that the sale of one subsidiary to another subsidiary followed by the liquidation of the purchased subsidiary as part of an integrated plan qualifies as a reorganization under Internal Revenue Code (IRC) section 368(a)(1)(D) and is not subject to IRC section 304, whether or not the subsidiaries are part of a consolidated group. While it does not directly address foreign corporations, the ruling may provide a means for repatriating earnings of controlled foreign corporations (CFCs) with minimal US income tax.