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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.

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.

Wolfgang Tischbirek, a tax partner formerly at US law firm Shearman & Sterling, has joined to P+P Pollath & Partner. Tischbirek left Shearman & Sterling in May 2004, where he was a partner specializing in international tax and mergers and acquisitions.

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.

London law firm Lovells has hired two senior government officials to launch a tax practice in Spain.

Jefferson Wells, a US professional services firm, has opened a UK office in London. The firm specializes in providing tax and compliance services to multinational companies from offices across the US.

The procedures for withholding tax exemption on Japan source income received by foreign corporations and non-residents in Japan have been changed from the submitting method (teishutsu) to the presenting method (teiji).

John Sanders, the international tax counsel of the government of Aruba, has criticized the EU’s Code of Conduct on Business Taxation as unfair on jurisdictions that are affiliated to EU member states.

Heather Devine, head of UK and cross-border taxation at Hanson, a multinational concrete producer, will join Barclays as group tax director in January 2005.

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