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David Garlick has been appointed as head of the large business service in the UK’s new HM Revenue and Customs (HMRC)

The recently-released 2004-05 Compliance Program for the Australian Tax Office (ATO) sounded a warning bell for companies, which will face aggressive compliance activity by the ATO in the coming year

When South Africa moved to the worldwide basis of taxing income and capital gains in 2000 and 2001, foreign dividends were taxed on a look-through basis. One traced the dividend through a chain of companies until the underlying profit was identified and a proportionate share of that profit was taxed in the South African shareholder's hands, with credit being given for foreign corporate and withholding taxes paid.

With the introduction of the business scale taxation and with companies using capital reductions to improve their financial conditions and to implement corporate reorganizations, there has been growing interest in the local tax consequences of capital reductions.

Mexico's President Vicente Fox has presented before Congress a bill to amend the Income Tax Law. This bill, which will be analyzed by Congress, includes a reduction in the income tax rate from the previously proposed 32% in 2005 to 30%, which will be reduced 1% each year until reaching 28% in year 2007.

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.

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).

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.

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

Type of deal Valuer Acquirer Target Adviser to acquirer (tax) Adviser to target (tax) M&A $2.3 billion International Power and Mitsui Edison Mission Energy agreed to sell its overseas assets Clifford Chance, London, Doug French Munger, Tolles & Olson, Los Angeles, Stephen Rose, Todd Molz M&A $4 billion Mylan Laboritories King Pharmaceuticals Skadden, Arps, Slate, Meagher & Flom, New York, Philip Adams Cravath, Swaine & Moore, New York, Lewis Steinberg M&A $161 million Priceline.com Holdco UK, a wholly-owned subsidiary of Priceline.com Active Hotels Baker & McKenzie, London, Geoff Kay Lovells, London, Sean Finn, Jessica McMichael, Dan Roman, Kiran Khetia M&A $265 million UBS Charles Schwab Corporation Sullivan & Cromwell, New York, Ronald Creamer Howard Rice Nemerovski Canady Falk & Rabkin, San Francisco, Stuart Lipton M&A $388 million Sumitomo Corporation JW Childs Associates agreed to sell The Hartz Mountain Corporation Dewey Ballantine Kaye Scholer, New York, Arthur Woodard M&A £5.8 billion ($10.4 billion) Cheung Kong Infrastructure Holdings, Macquarie European Infrastructure Fund and Scottish and Southern Energy (acquiring consortiums) agreed to acquire National Grid Transco's gas pipeline assets National Grid Transco agreed to sell its gas pipeline assets Herbert Smith, London, Derek Hill; Norton Rose, London, Dominic Stuttaford Linklaters M&A C$1.4 billion ($1.09 billion) Rogers Wireless Communications Microcell Telecommunications Fasken Martineau DuMoulin Stikeman Elliot, Montreal, Robert Hogan, Christian Meighen M&A £120million ($215.7 million) Oasis Stores group supported by the Baugur group Karen Millen Holdings KPMG, Birmingham, Brendan O'Grady, Iain Clarke, Rob Norris, Eddie Norrie, Iain Wright BDO, London, Tony Bogod, Lynne Pearson, David Ellis M&A Undisclosed SG Capital Europe and GIMV agreed to acquire the Sovitec group Cravey, Green & Wahlen agreed to sell the Sovitec group Linklaters, Brussels, Henk Vanhulle, Thierry Denayer, Antoine Dayez, Stéphane Martin; New York, Bob Smith; Madrid, Nicolas Martin, Javier Garcia-Pita, Marta Esteban; London, Valerie Leipheimer Alston & Bird; Jones Day; SJ Berwin; Wildgen & Partners M&A $4.8 billion A consortium led by the Sony Corporation of America Metro-Goldwyn-Mayer Skadden, Arps, Slate, Meagher & Flom; Dewey Ballantine Latham & Watkins; Christen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro M&A ?600-?625 million ($739-$770 million) Ripplewood Holdings The Carlyle Group agreed to sell Honsel International Technologies Latham & Watkins, Munich, Götz Wiese Millbank, Tweed, Hadley & McCloy, Munich, Norbert Rieger, Rolf Füger, Thomas Kleinheisterkamp M&A $1.52 billion WPP Group Grey Global Group Fried, Frank, Harris, Shriver & Jacobson, Washington DC, Alan Kaden Davis Polk & Wardwell, New York, Kathleen Ferrell M&A $600 million BAE Systems DigitalNet Holdings Cravath, Swaine & Moore, New York, Lewis Steinberg, Grace Lee, David Ware Fried, Frank, Harris, Shriver & Jacobson M&A $125 million Pfizer PA Consulting Group agreed to sell its 90% stake in Meridica Allen & Overy, London, David Lewis, Daniel Lewin Simmons & Simmons, London, Nick Cronkshaw, Darren Oswick M&A ?3.6 billion ($4.4 billion) Lone Star Hypo Real Estate agreed to sell a portfolio of real estate loans Mayer, Brown, Rowe & Maw, Frankfurt, Ingo Kleutgens Freshfields Bruckhaus Deringer, Frankfurt, Wilfried Schaefer, Jan Brinkmann M&A $1.2 billion First Reserve Corporation Ingersoll-Rand Company agreed to sell its Dresser-Rand Company unit Skadden, Arps, Slate, Meagher & Flom, New York, Philip Adams Simpson Thacher & Bartlett, New York, Charles Rappaport To get your deal (over $100 million) listed in International Tax Review contact Simon Briault on +44 207 779 8336 or sbriault@euromoneyplc.com