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A rapidly emerging issue is the impact that International Financial Reporting Standards (IFRS) will have on the thin capitalization "safe harbour" which is measured with reference to Australia's Generally Accepted Accounting Principles (AGAAP).

The Official Journal of the European Union of September 9 2004 contained the European Commission's invitation to submit comments to its letter to the Italian Government of May 7 2004 where it claimed that a certain Italian tax incentive should be treated as an illegitimate State aid pursuant to articles 87 and following of the EU Treaty.

The draft Finance Bill for 2005 provides for an amendment to the French Tax Code with respect to the tax consequences of the transfer by a French company of its registered office to another EU member state.

Draft legislation was recently released by the Canadian Department of Finance to implement many of the measures announced in the government's March 23 2004 Budget. Certain changes to the rules affecting income trust structures featured prominently in the Budget. The September 16 2004 draft Budget legislation contains some important changes from the measures announced in the Budget.

On July 23 2004, provisional measure 183 was converted into Law 10,925. Among other provisions, Law 10,925 maintains the 0% withholding tax rate applicable on payments of interest, commissions, expenses and discounts arising from certain securities which are placed through foreign banks having a minimum average maturity date of at least 96 months and contracted before January 1 2000. More specifically, article 12 of Law 10,925 set forth that the 0% withholding rate remains applicable upon the extension of the initial payment terms of the arrangements in place as of December 31 1999. The latter benefit will be maintained as long as the extension of the initial payment terms is made in accordance with the Brazilian Central Bank regulations.

In May 2004, the German Federal Ministry of Finance issued an updated and revised version of the comprehensive regulations that guide the tax authorities in their application of the Foreign Transactions Tax Law (Aussensteuergesetz - AStG). The revised regulations (published in the German Federal Gazette Part I 2004, special issue 1/2004) supersede those of December 1994 and reflect subsequent legislation and high court decisions.

During the ECOFIN meeting of September 10 and September 11 2004, the European Commission presented a non-EU-wide solution for profit determination rules for cross-border companies. This new approach, which is not yet a formal proposal and which arises from the failure to achieve unanimity at the EU level for further harmonization of EU member states' tax laws, will first be studied by working groups.

The Societas Europaea came into existence in October 2004. The EU needs to update some directives before the limited tax benefits are realized, says Deloitte's EU tax group

As previously mentioned in this column in April 2004, the Irish Finance Bill 2004 contained a number of measures aimed at increasing the attractiveness of Ireland as a corporate headquarters and holding company (HoldCo) jurisdiction. Broadly these new measures provided for an exemption from corporation tax on gains arising on the disposal of qualifying shares, and a wider double tax relief for foreign taxes levied on dividends received by an Irish resident company.

On September 6 2004 Law 25.924 introduced a transitory regime aimed at promoting investments in industrial activities and infrastructure during the next three years.