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The chief counsel of the Internal Revenue Service (IRS) in Washington, DC has disputed findings in a report from Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP) released in September 2004

Inter-company aid is the source of much dispute between companies and the French tax authorities, and has, over time, led to the French Supreme Administrative Court, defining a whole set of criteria regarding deductibility

On July 23 2004 the Italian central tax agency issued the explanatory notes (the Explanatory Notes) envisaged by article 8(2) of Law Decree 269, of September 30 2003 (Decree 269) necessary to allow certain enterprises that carry on an international activity (each an International Enterprise) to apply for the ad-hoc ruling procedure (the International Ruling Procedure) established by article 8 of same Decree 269.

The recently-released 2004-05 Compliance Program of the Australian Tax Office (ATO) sounded a warning bell for companies, which will face aggressive compliance activity by the ATO in the coming year. While this is not big news for large companies - to which the ATO took their audit stick last year - small-and-medium-sized enterprises (SMEs) should prepare to face harsher scrutiny.

Non-discrimination is at the centre of taxpayers' claim for an exemption from the Secondary Tax on Companies in South Africa. The government plans to stop them succeeding, reveal Anne Bennett & Nola Brown of Deloitte Touche Tohmatsu

Recently in Sutron Corporation (268 ITR 156), Indian advance ruling authority (AAR) examined the issue of whether the presence of a country manager in India constitutes a place of business and hence a permanent establishment (PE) of a company. In this case, a US company entered into a contract with the Government of Andhra Pradesh (GAP) in India, under which it was required to supply goods for erecting remote stations and also to provide local materials and services.

In its Manninen judgment of September 7 2004 (case C-319/02), the European Court of Justice (ECJ) held that, when taxing dividend income, an EU member state may not grant its resident individuals a credit for corporation tax paid by distributing domestic corporations, but deny such a credit on dividends paid by foreign corporations. Such discrimination against the dividends of foreign EU corporations impermissibly restricts the free movement of capital, which is guaranteed under article 56 of the EC Treaty.

Inter-company aid is the source of much dispute between companies and the French tax authorities, and has, over time, led to the French Supreme Administrative Court, defining a whole set of criteria regarding deductibility. It is now a well-established principle that a company cannot deduct an expense incurred in the sole interest of the group and that, in order to deduct, for tax purposes, a debt forgiveness or any other form of aid to a legally unrelated company, it must substantiate that the expense was incurred in its own interest (Conseil d'Etat, decision 132531 dated June 21 1995, Sofige).

The EU's newest members have reacted angrily to criticism from Nicolas Sarkozy, France's finance minister, that their low corporate tax rates are unfair. Sarkozy has claimed that the EU's 10 new members' states low corporate taxes are unfairly drawing jobs and investment away from older EU members.

Hungary's favourable tax regime for offshore companies ends in 2005. But the country's tax system will still be attractive to international business, believe Jacques de Servigny and Orsolya Bárdosi of Gide Loyrette Nouel